Official translation
REPUBLIC OF LITHUANIA
LAW
ON INSURANCE
18 September 2003
No.IX-1737
Vilnius
CHAPTER I
GENERAL PROVISIONS
Article 1. Objective of the Law
1. The objective of this Law is to regulate the insurance and insurance mediation
activity with a view to making the insurance system credible, efficient, safe and stable.
2. The Law shall specify persons who have the right to engage in the business of
insurance and reinsurance as well as insurance and reinsurance mediation in the Republic
of Lithuania, determine the main principles of state regulation of these activity, regulate
these activity and its characteristic features which a public company, a private company or
a European company (Societas Europaea) engaged in insurance or independent insurance
mediation activity must conform to. This Law shall also regulate characteristic features of
pre-contractual relations between parties to the contract, the terms and conditions of the
insurance contract, the relations arising from insurance contracts and relating to them as
well as other relations set out in this Law.
3. The provisions of this Law shall not apply to:
1) state social insurance relations;
2) relations regulated by the Law on Insurance of Deposits and Liabilities to
Investors.
4. Specific features of the establishment, licensing, activity, winding-up,
bankruptcy and state supervision of entities having the right to engage in the business of
accumulation of a portion of the state social insurance contribution, shall be established by
other laws.
5. Specific features of insurance activity of certain insurance companies may be
established by other laws.
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6. The activity related to pension accumulation which is set out in subparagraph 5,
paragraph 2, Article 7 of this Law shall be regulated by other laws of the Republic of
Lithuania.
7. The provisions of the Law on Companies shall apply to the relations regulated
by this Law to the extent this Law does not provide otherwise.
Article 2. Definitions
1. Insured person - in life and health insurance - the natural person specified in the
insurance contract to whom, upon occurrence of an insured event in his life, the insurer
must pay a benefit; in insurance against civil liability - the person specified in the
insurance contract whose property interests related to civil liability are covered by
insurance; in property insurance - the person specified in the insurance contract whose
property interests are covered by insurance.
2. Required solvency margin - the amount of solvency margin calculated
according to the procedures prescribed by legal acts which must be commensurate with the
scope and character of the insurer’s activity.
3. Civil liability insurance - the insurance of property interests related to civil
liability for the damage caused to the injured party or its property where the amount of the
benefit paid by the insurer depends on the amount of the indemnity which the insured
person must pay to the third party for the damage, which, however, must be within the
limits of the insurance sum if it specified in the contract.
4. Participating undertaking:
1) a parent undertaking;
2) an undertaking holding participation in any other undertaking in any of the
forms set out in paragraph 5 of this Article;
3) an undertaking which, though not related to any another undertaking or
undertakings referred to in paragraphs 28 and 48 of this Article, is managed in conjunction
with these companies under the contracts or provisions of the memorandums or articles of
association;
4) an undertaking which, though not related to any other undertaking or
undertakings referred to in paragraphs 28 and 48 of this Article, but in which the majority
of members of its administration, management or supervisory bodies have been the same
as in another company or other undertakings throughout the financial year until the
drafting of consolidated financial accounts.
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5. Participation - a direct or indirect holding of 20% or more voting rights at the
meeting of the highest managing body or 20% or more of the share/member share capital
of the undertaking, as well as any other real and long-term possibility to exercise influence
over
the
decisions
related
to
the
activity of
the
undertaking both
as
a
shareholder/participant and a holder of any other rights related to the share/member share
capital.
6. Large insurance risk – insurance risk under the criteria set out in Article 10 of
this Law.
7. Policyholder - a person who has applied to the insurer in order to conclude an
insurance contract, or who has received an offer from the insurer to conclude an insurance
contract, or who has concluded an insurance contract with the insurer.
8. Insurer - a person authorised under law to engage in insurance activity.
9. Insurer’s surplus share/bonus - the amount of the insurer’s earnings due to a
policyholder/beneficiary in the cases provided in a capital accumulation life assurance
contract, calculated and paid according to the procedure provided in the contract.
10. Insurers’ Bureau - an association of insurers who are engaged in the activity
of the insurance class specified in subparagraph 10, paragraph 3, Article 7 of this Law in
the Republic of Lithuania other than carriers liability insurance, established according to
the procedure provided by laws, or an analogous association of any another European
Union Member State.
11. Insured event - an event specified in the insurance contract upon occurrence of
which the insurer is obliged to pay the benefit.
12. Cover - the commitment of the insurer to pay a benefit upon occurrence of an
insured event.
13. Premium - the amount of money specified in the insurance contract which the
policyholder pays to the insurer for the coverage.
14. Insurance undertaking – an undertaking which, according to the procedure
prescribed by this Law, has been granted a licence to engage in insurance activity.
15. Insurable interest – a loss that the policyholder, the insured person, or the
beneficiary may incur upon occurrence of an insured event.
16. Benefit - an amount of money which the insurer must pay, according to the
procedure specified in the insurance contract, to the policyholder or another person who is
entitled to the insurance benefit upon occurrence of an insured event, or any other form of
payment of benefit provided in the insurance contract.8
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17. Insurance holding company - a parent undertaking which is not a mixedactivity holding company yet the main business of which is to acquire and hold
participations in subsidiary undertakings, where those subsidiary undertakings are
exclusively or mainly insurance undertakings, insurance, reinsurance undertakings of any
other European Union Member State or non-member-country insurance undertakings, one
at least of such subsidiary undertakings being an insurance undertaking of another EU
Member State or a non-member country.
18. Insurance period - the time interval from the beginning until the end of
insurance coverage, which does not necessarily coincide with the term of the insurance
contract.
19. Insurance policy - the document issued by the insurer certifying conclusion of
the insurance contract.
20. Insurance object - property interests related to a person’s life, health, property,
or liability.
21. Insurance risk - a peril threatening to the insurance object.
22. Sum insured - the sum of money specified in the insurance contract or the sum
of money which is calculated by the method specified in the insurance contract, which,
except for the cases provided in the contract, shall be equal to the maximum benefit which
may be paid under the insurance contract.
23. Insurance policy conditions - standard insurance contract conditions drafted
by the insurer.
24. Insurance intermediary - a person performing insurance mediation activity
for a certain payment
25. Insurance mediation - the commercial economic activity of introducing,
proposing or carrying out other work preparatory to the conclusion of contracts of
insurance, or of concluding such contracts, or of assisting in the administration and
performance of such contracts, in particular in the event of a claim. This activity when
undertaken by an insurance undertaking or an employee of an insurance undertaking shall
not be considered as insurance mediation. The provision of information on an incidental
basis in another professional activity, provided that the purpose of the activity is not to
assist the customer in concluding or performing an insurance contract, the management of
claims of an insurance undertaking on the basis of a contract with the insurer, loss
adjusting and expert appraisal of claims shall not be considered as insurance mediation. .
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26. Technical provisions – insurer’s obligations arising from insurance and/or
reinsurance contracts or relating to them which are calculated following the procedure set
out by legal acts.
27. Insurance activity - economic-commercial activity whereby the risk of the
losses of other persons is assumed in the form of the insurance contract or it is sought to
protect property interests of these persons in any other way upon occurrence of insured
events, by using for the security of those interests, the insurer’s assets covering technical
provisions and other assets. For the purposes of this Law, insurance activity shall also be
the activity set out in subparagraph 5, paragraph 2, Article 7 of this Law. The concept
“insurance activity” in this Law shall not include reinsurance.
28. Subsidiary - an undertaking which meets at least one of the criteria listed
bellow:
1) an undertaking in which another undertaking has a majority of voting rights of its
shareholders or other participants;
2) an undertaking in which another undertaking, a shareholder/participant of the
first, has the right to appoint and recall the majority of members of the administration,
management or supervisory body of the first undertaking;
3) an undertaking over which, under the provisions of its memorandum, articles of
association or contracts concluded with another company, an undertaking may exercise a
dominant influence;
4) an undertaking in which another undertaking, under contracts concluded with its
shareholders/participants, controls the majority of its shareholders’/participants’ voting
rights;
5) an undertaking over which, in the opinion of the competent authority, another
undertaking is exercising a dominant influence;
6) an undertaking which, under the criteria of paragraphs 1 - 5, is a subsidiary of a
subsidiary. In this case, it shall be considered a subsidiary of the parent undertaking whose
subsidiary has a subsidiary.
29. European Union Member State - the Republic of Lithuania or any other state
that is a member of the European Union. For the purposes of this Law, the concept of the
Member State of the European Union shall also include states of the European Economic
Area.
30. European Union Member State where the risk is situated – a Member State
of the European Union, where:
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1) property is situated when an insurance contract relates to buildings or buildings
together with property in them, if this property is insured under the same insurance
contract;
2) a vehicle of any type related to an insurance contract is registered;
3) the policyholder has concluded an insurance contract for not longer than four
months for travel or holiday risks, irrespective of the insurance class these risks might
belong;
4) the policyholder’s permanent place of residence, his head office, a branch or
agency that are related to the insurance contract is located only in all other cases except
which have not been specified in subparagraphs 1-3 of this paragraph.
31. European Union Member State of provision of services - a Member State of the
European Union where the risk is situated or a European Union Member State of
commitment under a life insurance contract, if the insurance contract regarding that risk or
commitment is concluded not by an insurance undertaking of this European Union
Member State, or a branch of an insurance undertaking established in this European Union
Member State, or a branch of an insurance undertaking of another European Union
Member State.
32. Guarantee fund - the reserve of an association of insurers engaged in the
insurance class specified in subparagraph 10, paragraph 3, Article 7 of this Law, except
carriers’ liability insurance, in the Republic of Lithuania, or any other analogous formation
provided by legislation of any other European Union Member State.
33. Life assurance - the insurance of property interests related to life and/or capital
accumulation of a natural person where due to insured events, such as death of the insured,
maturity of the insurance term established in the insurance contract or other insured event,
insurance benefits are paid in lump sum or in instalments.
34. Close link - a situation in which persons are linked by control or participation.
If one person controls two or more persons it is considered that there is a close link
between these persons.
35. Group of companies - a group of undertakings which consists a parent
undertaking, its subsidiaries and undertakings in which the parent undertaking or its
subsidiaries hold a participation in the manner specified in the manner specified in
paragraph 4 of this Article.
36. Measures involving intervention - measures applied by the court or the
Insurance Supervisory Commission of the Republic of Lithuania (hereinafter – “the
Supervisory Commission” in order to preserve or restore the financial position of an
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insurance undertaking or a subsidiary of a non-member-country insurance undertaking and
the interests of policyholders, the insured persons, beneficiaries, the injured party or other
creditors or to implement the objectives established in Article 2.124 of the Civil Code, and
which due to their nature have an effect on the rights and obligations of the persons of
undertakings other than the insurance undertaking itself or a branch of a non-membercountry insurance undertaking.
37. European Union Member State of the commitment under a life insurance
contract - a Member State of the European Union, where a permanent place of residence
or the head office of the policyholder related to the life assurance contract is situated.
38. Surrender value - the sum calculated by actuarial/mathematical methods with
regard to part of paid insurance premiums intended for capital accumulation, the interest
accrued during the contract term, the part of the insurer’s profit due to the policyholder
under the contract and other elements specified in the insurance contract.
39. Another European Union Member State - a European Union Member State
other than the Republic of Lithuania.
40. Insurance undertaking of another European Union Member State – an
undertaking that has a right to carry out insurance activity under legal acts of the said
Member State.
41. Competent authority – the authority which supervises insurance, insurance or
reinsurance mediation activity. The Insurance Supervisory Commission of the Republic of
Lithuania shall be the competent authority of the Republic of Lithuania.
42. Control – the relationship between a parent undertaking and a subsidiary, as
defined in paragraphs 28 – 48 of this Article, or a similar relationship between any natural
or legal person and an undertaking. Control may be direct and indirect.
43. Mixed-activity insurance holding company – a parent undertaking other than
an insurance undertaking, an insurance undertaking of another European Union Member
State, an insurance undertaking of a non-member country, a reinsurance undertaking, an
insurance holding company or a mixed-activity financial holding company, under
condition that at least one of its subsidiaries is an insurance undertaking of another
European Union Member State or an insurance undertaking of a non-member country.
44. Solvency margin– the insurer’s assets which exceed obligations arising from
insurance and/or reinsurance contracts.
45. Beneficiary - the person specified in the insurance contract or the person
appointed by the policyholder and, in the cases specified in the contract, also the person
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appointed by the insured who is entitled to the benefit upon occurrence of the insured
event.
46. Irrevocable beneficiary - the beneficiary who may not be revoked or replaced
unilaterally, at the discretion of the policyholder or, in the cases specified in the insurance
contract - of the insured person, without prior consent of the beneficiary.
47. Injured party - in civil liability insurance - the person who has been caused
damage or injury by the policyholder or the insured person.
48. Parent undertaking – an undertaking which meets at least one of the criteria
listed below:
1) it has the majority of shareholders’ or other participating votes in another
undertaking;
2) as a shareholder/participant of another undertaking, it has the right to appoint
and recall the majority of members of administration, managing and supervisory bodies of
that undertaking;
3) it may exercise a significant influence over another undertaking because of the
contracts concluded with that undertaking, the provisions of the incorporation instrument
or of the articles of association of that undertaking;
4) under the contracts concluded with the shareholders/participants of another
undertaking, it has control over the majority of votes of that undertaking’s
shareholders/participants;
5) in the opinion of a competent authority the undertaking exercises an effective
influence over another undertaking.
49. Reinsurance – a type of insurance, where, for an insurance premium, insurer’s
anticipated risk of claims payment or other loss conditioned by its activity is accepted.
50. Reinsurance undertaking - an undertaking, other than that indicated in
paragraphs 14, 40 or 61 of this Article, whose principal activity is claims payment or
acceptance of other loss of insurance activity risk, or acceptance of other reinsurance loss
risk when engaged in reinsurance of these risks in respect of insurance undertakings,
insurance undertakings of other European Union Member States, and non-member country
insurance undertakings.
51. Reinsurance intermediary - a person engaged in reinsurance mediation
activity for payment.
52. Reinsurance mediation - the economic commercial activity of introducing,
proposing or carrying out other work preparatory to the conclusion of contracts of
reinsurance, or of concluding such contracts, or of assisting in the administration and
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performance of such contracts, in particular in the event of a claim. These activity when
undertaken by an insurance undertaking or an employee of a reinsurance undertaking who
is acting under the responsibility of the reinsurance undertaking are not considered as
reinsurance mediation. The provision of information on an incidental basis in the context
of another professional activity provided that the purpose of the activity is not to assist the
customer in concluding or performing as reinsurance contract, the management of claims
of a reinsurance undertaking on the basis of a contract with the insurer, and loss adjusting
and expert appraisal of claims shall also not be considered as reinsurance mediation.
53. Dependent insurance intermediary – any person who carries on the activity
of insurance mediation for and on behalf of one or more insurance undertakings and their
interests. Any person who carries on the activity of insurance mediation for and on behalf
of one or more insurance undertakings and in their interests, in addition to his principal
professional activity, is also considered a dependent insurance intermediary if the
insurance is complementary to the goods and services supplied within the framework of
this professional activity
54. Right of establishment - the right to establish in another European Union
Member State a subsidiary or a branch of an insurance undertaking, a subsidiary or a
branch of an undertaking of insurance intermediaries, or the right to establish in the
Republic of Lithuania a subsidiary or a branch of an insurance undertaking of another
European Union Member State, a subsidiary or a branch of an undertaking of insurance
intermediaries of another European Union Member State.
55. Related undertaking – a subsidiary or other undertaking in which a
participation is held by another undertaking in the manner specified in paragraph 4 of this
Article.
56. Health insurance - insurance of property interests related to health of a natural
person where due to insured events related to health of the person a benefit is paid in the
amount of the sum insured or its part, or in the amount of the loss resulting from an
insured event. Health insurance shall include accident insurance and sickness insurance.
57. Right to provide services – the right of an insurance undertaking to engage in
insurance activity in another European Union Member State without establishing a
subsidiary or a branch, the right of insurance intermediaries to engage in insurance
mediation activity in another European Union Member State without establishing a
subsidiary or a branch of insurance intermediaries, or the right of an insurance undertaking
of another European Union Member State to engage in insurance activity in the Republic
of Lithuania without establishing a subsidiary or a branch of an insurance undertaking, and
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the right of insurance intermediaries of another European Union Member State to engage
in insurance mediation activity in the Republic of Lithuania without establishing a
subsidiary or a branch of insurance intermediaries.
58. Available solvency margin – the amount of the insurer’s assets in excess of
his obligations, arising from insurance and/or reinsurance contracts and calculated in
accordance with the procedure set out in legal acts.
59. Property insurance - insurance of a person’s property interests where the
amount of the benefit depends, within the limits of the sum insured, on the amount of the
loss and other expenses incurred by the person.
60.non-member country - a country which is not a Member State of the European
Union or of the European Economic Area.
61. Insurance undertaking of a non-member country – an undertaking engaged
in insurance activity, registered in a non-member country, which, according to the nature
of its activity should have to obtain a licence to engage in insurance activity as set out in
this Law or an equivalent authorisation if it were registered in the Republic of Lithuania or
any other European Union Member State.
Article 3. Insurance Activity
1. The following shall have the right to engage in insurance activity in the Republic
of Lithuania:
1) insurance undertakings - public companies, private companies, and European
companies (Societas Europaea) established in the manner prescribed by laws of the
Republic of Lithuania and which have obtained a licence to engage in insurance activity
according to the procedures set out in this Law;
2) insurance undertakings of other European Union Member States, exercising the
right of establishment and/or the right to provide services.
3) branches of insurance undertakings of foreign countries established in the
Republic of Lithuania having a licence to carry on insurance activity as branches
according to the procedure prescribed by this Law.
2. The entities referred to in paragraph 1 of this Article may not engage in the
Republic of Lithuania in any other commercial economic activity other than insurance,
reinsurance and related activity - management of insured and reinsured events, insurance
and reinsurance mediation, consulting on questions relating to insurance and reinsurance,
mediation in concluding pension accumulation contracts save supplementary voluntary
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accumulation, training insurance and reinsurance specialists, in-service training, as well as
leasing of immovable property and valuation of property to be insured.
3. Persons referred to in paragraph 1 of this Article may engage in insurancerelated insurance mediation activity only as dependent insurance intermediaries.
4. All other persons not named in this Law shall be prohibited from carrying on
insurance activity in the Republic of Lithuania, except in the cases established by the
Supervisory Commission, where the insurance coverage by a branch of a non-membercountry insurance undertaking established in the Republic of Lithuania or a branch of an
insurance undertaking of another Member State of the European Union is not recognised
due to compulsory insurance in a non-member country.
Article 4. Reinsurance Activity
In the Republic of Lithuania, only entities referred to in paragraph 1 of Article 3 of
this Law as well as those listed below shall have the right to engage in reinsurance activity:
1) reinsurance companies of the Republic of Lithuania;
2) reinsurance companies of other European Union Member States both those
which have established a branch in the Republic of Lithuania and those which have not;
3) non-member country reinsurance companies both those which have established a
branch in the Republic of Lithuania and those which have not.
Article 5. Insurance and Reinsurance Mediation Activity
1. In the Republic of Lithuania, only the following shall have the right to engage in
mediation activity:
1) undertakings (insurance agents undertakings) of any legal form established
according to the laws of the Republic of Lithuania and natural persons, who are engaged in
insurance mediation activity (insurance agents) according to the procedures established by
laws of the Republic of Lithuania. Insurance agents companies and insurance agents shall
be dependent insurance intermediaries;
2) insurance brokers undertakings established according to the procedures
prescribed by laws of the Republic of Lithuania, such as public companies, private
companies and European companies which have obtained a licence to engage in insurance
brokers activity according to the procedure set out in this Law. Insurance brokers
undertakings shall be independent insurance intermediaries;
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3) insurance intermediaries of other European Union Member States which carry
on insurance mediation activity in the Republic of Lithuania, exercising the right of
establishment and/or the right to provide services;
4) branches of insurance intermediaries of foreign countries established in the
Republic of Lithuania.
2. In the Republic of Lithuania, only persons referred to paragraph 1 of Article 3
and paragraph 1 of Article 5 of this Law as well as the persons listed below shall have the
right to engage in reinsurance mediation:
1) insurance brokers undertakings;
2) reinsurance intermediaries of other European Union Member States which are
engaged in reinsurance mediation activity in the Republic of Lithuania both those which
have established a branch and those which have not;
3) reinsurance intermediaries of foreign states, which have not established a branch
in the Republic of Lithuania, or branches of insurance intermediaries and/or reinsurance
intermediaries of foreign countries established in the Republic of Lithuania.
3. Insurance undertakings or branches of insurance undertakings of foreign
countries, insurance companies of other European Union Member States exercising the of
establishment and/or the right to provide services shall be prohibited from using the
services of persons who do not have the right to be engaged in insurance or reinsurance
mediation activity.
Article 6. Agencies
The procedures set out in this Law regarding establishment of branches, their
activity and supervision of the activity shall be applicable to the agencies or any other
offices managed by the employees and persons of the founding undertaking, who have a
permanent or a long-term authorisation to operate on behalf of the undertaking they
represent, where:
1) the agency or office is being founded in another Member State of the European
Union by an insurance undertaking or an undertaking of insurance intermediaries of the
Republic of Lithuania;
2) the agency or office in the Republic of Lithuania is being founded by an
insurance undertaking or an undertaking of insurance intermediaries of another Member
State of the European Union.
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Article 7. Branches and Classes of Insurance
1. Insurance branches shall be life assurance and non-life insurance.
2. Life assurance shall comprise the following assurance classes:
1) life assurance other than provided in classes 2 - 5;
2) marriage and birth insurance;
3) life assurance related to investment funds (when the investment risk is borne by
the policyholder);
4) tontines;
5) accumulation of pensions activity.
3. Non-life insurance shall comprise the following insurance classes:
1) accident insurance;
2) sickness insurance;
3) land vehicles (other than railway rolling stock)insurance;
4) railway rolling stock insurance;
5) aircraft insurance;
6) ships (sea and internal waters) insurance;
7) goods in transit insurance;
8) property (other than in subparagraphs 3, 4, 5, 6 and 7) insurance against fire and
natural forces;
9) property insurance against other risks (other than in subparagraph 8);
10) liability arising out of the use of motor vehicles operating on the land;;
11) liability arising out of the use of aircraft;
12) liability arising out of the use of ships (sea and internal waters);
13) general liability insurance;
14) credit insurance;
15) suretyship insurance;
16) financial loss insurance;
17) legal expenses insurance;
18) assistance insurance.
4. Where the licence for insurance activity or the authorisation for the activity of a
branch of a non-member-country insurance undertaking simultaneously covers:
1) insurance classes in subparagraphs 1 and 2, paragraph 3 of this Article, it shall
be named accident and sickness insurance (health insurance);
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2) insurance class in subparagraph 1, paragraph 3 of this Article covering
passenger injury insurance and insurance classes in subparagraphs 3, 7 and 10, paragraph 3
of this Article shall be named motor insurance;
3) insurance class in subparagraph 1, paragraph 3 of this Article covering
passenger injury insurance and classes in subparagraphs 4, 6, 7 and 12, paragraph 3 of this
Article shall be named marine and transport insurance;
4) insurance class in subparagraph 1, paragraph 3 of this Article covering
passenger injury insurance and classes in subparagraphs 5, 7, and 11, paragraph 3 of this
Article shall be named aviation insurance;
5) insurance classes in subparagraphs 8 and 9, paragraph 3 of this Article shall be
named fire and other damage to (destruction of) property;
6) insurance classes in subparagraphs 10, 11, 12 and 13, paragraph 3 of this Article
shall be named liability insurance;
7) insurance classes in subparagraphs 14 and 15, paragraph 3 of this Article shall
be named credit and suretyship insurance;
8) all insurance classes in paragraph 3 of this Article shall be named non-life
insurance risks insurance.
5. The Supervisory Commission shall approve the description of life assurance and
non-life insurance classes which shall be observed by insurance undertakings and branches
of foreign insurance undertakings.
Article 8. Difference Between Life and Non-Life Insurance Activity in the
Republic of Lithuania
1. None of the entities specified in paragraph 1 Article 3 of this Law, shall have the
right to engage in both life and non-life insurance, save for the cases and exceptions
referred to in paragraph 2 of this Article, and paragraph 3, Article 224 of this Law, where
the legislation of a Member State of the European Union authorises an insurance
undertaking of another European Union Member State to carry on both life and non-life
insurance activity.
2. The entities referred to in paragraph 1, Article 3 of this Law, which are engaged
in life insurance shall also have the right to engage only in the activity of non life
insurance classes indicated in subparagraphs 1 and 2, paragraph 3, Article 7 of this Law
following the procedure established by laws.
3. Insurance undertakings and branches of insurance undertakings of foreign
countries must follow the rules of life-assurance activity and the rules of separate
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administration of non-life insurance classes listed in subparagraphs 1 and 2, paragraph 3,
Article 7 of this Law, approved by the Supervisory Commission
Article 9. Ancillary Insurance Risks of Non-Life Insurance
1. An insurance undertaking which has a licence to engage in insurance activity, or
a branch of a non-member-country insurance undertaking having an authorisation for
insurance activity of a branch granted for carrying on the insurance activity of the principal
risk belonging to the non-life insurance class or a group of classes, shall have the right,
without changing the licence for insurance activity or the authorisation for the insurance
activity of the branch, to conclude insurance contracts for ancillary insurance risks
belonging to other insurance classes of non-life insurance provided that the following
conditions are met:
1) ancillary insurance risk is connected with the principal insurance risk;
2) ancillary insurance risk concerns the object which is covered against the
principal risk;
3) ancillary risk is covered by the insurance contract insuring the principal risk.
2. The risks of insurance classes listed in subparagraphs 14, 15, and 17, paragraph
3, Article 7 of this Law may not be regarded as risks ancillary to other classes, with the
exception of cases indicated in paragraphs 3 and 4 of this Article.
3. Insurance risk belonging to the insurance class in subparagraph 17, paragraph 3
of Article 7 of this Law may be considered as ancillary to the risks of insurance class
referred to in subparagraph 18, paragraph 3, Article 7 of this Law only when the
conditions specified in paragraph 1 of this Article are fulfilled, and when the principal risk
is exclusively related to providing assistance to persons who encounter difficulties while
travelling, while away from home or from their permanent place of residence.
4. Insurance risk belonging to the insurance class referred to in subparagraph 17,
paragraph 3, Article 7 of this Law, may also be considered ancillary insurance risk only
when the conditions specified in paragraph 1 of this Article are fulfilled and when it is
related to arguments or risks which arise out of or are related to the use of sea vessels.
Article 10. Large Insurance Risk
1. Insurance risk shall be considered large if it belongs to the following:
1) insurance classes specified in subparagraphs 4, 5, 6, 7, 11, and 12, paragraph 3,
Article 7 of this Law;
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2) insurance classes referred to in subparagraphs 14 and 15, paragraph 3, Article 7
of this Law, where the policyholder is involved in commercial activity or is a selfemployed professional, and the insurance risks are related to this activity.
2. An insurance risk shall also be considered large if it belongs to the insurance
class referred to in subparagraphs 3, 8, 9, 10, 13, and 16, paragraph 3, Article 7 of this
Law, and the insurer of the risk of this group exceeds at least two of the following values:
1) the amount of assets indicated in the balance sheet of the policyholder is at least
EUR 6 200 000;
2) the net assets of the policyholder totals or exceeds EUR 12 800 000;
3) the average number of personnel employed by the policyholder is at least 250
during the accounting year.
3. If the policyholder belongs to a group of persons the consolidated accounts of
which are made in compliance with the requirements set forth in the Law on Consolidated
Accounts of Enterprises or in an equivalent legal act of another Member State of the
European Union, the values referred to in paragraph 2 of this Article shall be established
on the basis of the values set out in the consolidated accounts.
Article 11. Evaluation of Good Repute, Professional Qualifications and
Experience
1. A natural person shall not be considered of good repute if:
1) he has been convicted for any premeditated criminal acts, has previous
convictions for administrative offences relating to property, commerce, finance,
accounting and statistics;
2) a disciplinary sanction to dismiss this person from his position or an official
sanction to dismiss him from office is still effective;
3) the person abuses narcotic, toxic, psychotropic substances or alcohol;
4) there are other important reasons why the person may not be considered of good
repute.
2. A legal person shall not be considered of good repute where:
1) he has incurred criminal or administrative liability;
2) members of the managing bodies of this person and natural persons supervising
this legal person are not of good repute, and the legal person supervising this legal person
has incurred criminal or administrative liability;
3) there are other important reasons why this person may not be considered of good
repute.
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3. When evaluating professional qualifications and experience of a natural person,
the entities provided for in this Law shall take into consideration the person’s educational
background, the positions held, length of service and other factors which may have
influence on the professional qualifications and experience of the person.
4. When good repute, professional qualifications and experience is evaluated by the
Supervisory Commission, the information about the person’s good repute, professional
qualifications and experience shall be submitted in special forms set by the Supervisory
Commission. When verification of the data provided in the forms is needed, the
Supervisory Commission must have the right to request the person to provide additional
documentation and information essential for the assessment of good repute, professional
qualifications and experience as well as the right to seek that information from the persons
specified in Article 196 of this Law.
CHAPTER II
INSURANCE UNDERTAKINGS OF THE REPUBLIC OF LITHUANIA
SECTION ONE
LICENCE TO ENGAGE IN INSURANCE ACTIVITY
Article 12. Licence to Engage in Insurance Activity
1. An insurance undertaking shall have the right to engage in insurance activity in
the Republic of Lithuania subject to a licence to engage in insurance activity granted by
the Supervisory Commission. The Supervisory Commission shall establish the rules of
licensing of insurance activity.
2. A licence for insurance activity shall be granted:
1) to a public company, private company or a European company which is being
incorporated;
2) to a new public company, private company, or a European company to be
operated upon the reorganisation of legal persons;
3) to a public company, private company or European company which is changing
its type of business into insurance activity.
3. A licence for insurance activity shall also be effective in all the other European
Union Member States, providing the right to engage in insurance activity through
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exercising the right of establishment and/or the right to provide services under the
conditions specified in this Section V of this Chapter.
4. A licence for insurance activity shall be issued to engage in insurance activity of
the entire insurance class or several groups, belonging to branches of life assurance or nonlife insurance, except for the cases when the applicant is willing to engage in insurance of
only some risks belonging to the insurance class/classes.
5. A licence to engage in insurance activity shall be issued for an indefinite period
of time.
6. A licence to engage in insurance activity shall be issued only for a particular
insurance undertaking and may not be transferred to another person.
7. The form of a licence to engage in insurance activity shall be established by the
Supervisory Commission.
8. An insurance undertaking which is to be incorporated may be registered in the
Register of Legal Persons, and, where the licence for insurance activity is issued not to the
undertaking about to be incorporated, appropriate changes in the Register of Legal Persons
may be made only upon granting the licence for insurance activity.
9. The Supervisory Commission must inform the Register of Legal Persons about
the granting, suspension or withdrawal of a licence according to the procedure set out in
the regulations of the Register of Legal Persons.
10. The insurance undertaking must, within 5 working days, inform the
Supervisory Commission about the registration in the Register of Legal Persons.
11. The instruments of incorporation of the insurance undertaking shall become
invalid if they are not submitted to the Register of Legal Persons within nine months from
the date of their execution.
Article 13. Name of the Insurance Undertaking
The name of an insurance undertaking must contain the word “insurance”. No
other legal person shall have the right to use in its name this word or the combination
“insurance undertaking” or a similar phrase, save for the exceptions provided by law.
Article 14. Application for Licence to Engage in Insurance Activity
1. Applicants must submit an application to the Supervisory Commission for a
licence to engage in insurance activity.
2. The application for a licence shall be accompanied by the following documents
and information in writing:
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1) articles of association and the memorandum of association of the insurance
undertaking;
2) a scheme of operations of the contents and form prescribed by the Supervisory
Commission;
3) information in the form prescribed by the Supervisory Commission about the
controlling persons of the insurance undertaking, the participating undertakings and all the
other shareholders. Information shall also be submitted about the members of the
controlling legal persons as well as of the supervisory and management bodies of the
participating undertakings;
4) information in the form prescribed by the Supervisory Commission about the
chairman and other members of the supervisory board, the chairman and other members of
the board, and the head of administration of the insurance undertaking;
5) information in the form prescribed by the Supervisory Commission about the
chief financier and chief actuary;
6) documents certifying the accumulation in currency of the organisational fund of
the insurance undertaking, its use and balance;
7) documents certifying the payment in currency for shares of the insurance
undertaking to be incorporated;
8) information about the origin of the organisational fund and the currency used to
pay for the shares of the insurance undertaking to be incorporated or to form its authorised
capital;
9) contracts concluded on behalf of the insurance undertaking as specified in
paragraph 1, Article 27 of this Law;
10) documents attesting payment of the state charge for the licence to engage in
insurance activity;
11) where the insurance undertaking intends to engage in the insurance class listed
in subparagraph 10, paragraph 3 of Article 7, except carriers’ liability insurance, the
documents attesting that the insurance undertaking has its representatives with adequate
authorisations appointed in every European Union member state for settlement of claims.
3. Where the founder is a legal person, the following shall be submitted in addition:
1) a transcript of the registration certificate or any other equivalent document of the
founder;
2) financial statements of the founder for the last year along with an auditor’s
opinion. This provision shall not apply where the founder is neither a controlling nor a
participating undertaking of the insurance undertaking to be incorporated.
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4. Where the insurance undertaking or legal persons are reorganised into a new
legal person – an insurance undertaking or where a public company, a private company or
a European company change the type of their activity into insurance business, the
documents listed in subparagraph 7, paragraph 2 of this Article need not be submitted, yet,
the following must be submitted in addition:
1) terms and conditions of reorganisation, the decision on reorganisation or
changing of the type of the activity of the legal person;
2) a transcript of the registration certificate or any other equivalent document of
each legal person, description of their previous activity, financial statements for the last
year along with an auditor’s opinion if the Supervisory Commission has no right to obtain
financial statements from the Register of Legal Persons in accordance with the procedure
prescribed by legal acts;
3) information about the controlling persons of each legal person, their
participating undertakings and all other shareholders;
4) documents certifying that the funds of the insurance undertaking are not less
than the organisational fund and the authorised capital as provided in this Law as well as
the information about the origin of the funds;
5) proof of tax payment and debts to creditors of each legal person.
5. Where an insurance undertaking of a foreign state is the founder of a subsidiary,
it must, in addition, submit:
1) a licence for insurance activity or any other equivalent document issued by
competent authorities of the foreign state;
2) an authorisation for the establishment of the insurance undertaking in the
Republic of Lithuania issued by competent authorities of the foreign state or the
information that the institution does not object to the establishment of a subsidiary of an
insurance undertaking in the Republic of Lithuania.
6. The minimum guarantee fund of an insurance undertaking seeking a licence to
engage in insurance activity is to include, when calculating it, the funds received after the
payment of shares, or the funds provided for the authorised capital of the insurance
undertaking as specified in paragraph 4, subparagraph 4 of this Article, must be in the
amounts specified in subparagraph 3 of Article 39, having regard to the insurance classes
which are contemplated. The assets of the organisational fund shall not be included when
determining the minimum guarantee fund. The applicants must submit the documents
testifying that the guarantee fund has been formed in currency as well as the origin of the
assets.
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Article 15. Issuance of a Licence to Engage in Insurance Activity
1. Within six months from the submission of the application and all relevant
documents for the issue of a licence to engage in insurance activity the Supervisory
Commission shall adopt a decision concerning the issue of a licence to engage in insurance
activity and inform the applicant thereof in writing.
2. The Supervisory Commission shall refuse to issue a licence to engage in
insurance activity where:
1) the documents prescribed by this Law or the documents required according to
the procedure established by this Law have not been presented; or where the submitted
documents do not meet the requirements set out in the legal acts of the Republic of
Lithuania;
2) the founders of the insurance undertaking and/or the controlling persons and the
participating undertakings are not in compliance with the criteria established in paragraph
3 of Article 20 of this Law, and/or, in view of their business results, legislative provisions
and other significant circumstances their financial position is not stable and sound;
3) the chairman and other members of the Supervisory Board, the chairman and
other members of the Management Board, the head of the administration, the chief
financier and the chief actuary of the insurance undertaking do not meet the requirements
set out in paragraph 4 of Article 20 of this Law;
4) it may be assumed from the presented scheme of operations that the interests of
the policyholders, the insured, the beneficiaries, and the injured party will not be
sufficiently protected, or there is a reasonable ground to assume that obligations of the
insurance undertaking arising from insurance contracts will not be performed
continuously;
5) the authorised capital has not been fully paid-up;
6) the organisational fund and/or the authorised capital of the undertaking have
been paid up from financial resources of illegal origin;
7) the structure of the insurance undertaking or a group of undertakings to which
the insurance undertaking belongs or other close links with natural or legal persons make
effective supervision impossible;
8) legal acts of anon-member country which are applicable to members of a group
of undertakings to which the insurance undertaking belongs, to natural or legal persons
having close links with the insurance undertaking, or difficulties in the implementation of
these legal acts make effective supervision impossible;
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9) the insurance undertaking is a successor to the rights and obligations of a legal
person or persons the performance of which would violate the provisions of paragraph 2 of
Article 3 of this Law and/or would endanger the interests of the policyholder, the insured,
the beneficiaries, and the injured party;
10) the chairman and other members of the supervisory board, the chairman and
other members of the board, the head of the administration, the chief financier or the chief
actuary of the insurance undertaking hold positions which they are prohibited to hold
according to this and other laws;
11) the requirement specified in paragraph 6, Article 14 of this Law has not been
complied with or the origin of the financial resources of the guarantee fund is illegal.
3. When there is a suspicion that the authorised capital and the organisational fund
and/or the minimum guarantee fund may be formed from the financial resources of an
illegal origin, the Supervisory Commission must apply to the State Security Department
seeking a conclusion about the origin of the funds. In this case, the time periods specified
in this paragraph 1 of this Article and paragraph 11 of Article 12 shall be suspended and
shall be resumed upon receipt of the conclusion from the State Security Department.
Article 16. Consultation with Other Institutions
1. Prior to issuance of the licence for insurance activity, the Supervisory
Commission must consult competent authorities of another Member State of the European
Union about the circumstances significant for issuing the licence for insurance activity,
where the insurance undertaking is:
1) a subsidiary of an insurance undertaking of any other European Union Member
State;
2) a subsidiary of the parent undertaking of an insurance undertaking of any other
European Union Member State;
3) under the control of the same person who controls the insurance undertaking of
any other European Union Member State.
2. Prior to issuance of the licence for insurance activity, the Supervisory
Commission must consult the Bank of Lithuania and the Securities Commission about the
circumstances significant for issuing the licence for insurance activity, where the
undertaking is:
1) a subsidiary of a credit institution or a financial broker of a Member State of the
European Union;
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2) a subsidiary of the parent undertaking of a credit institution or a financial broker
of a Member State of the European Union;
3) under the control of the same person who controls the credit institution or the
financial broker of any other Member State of the European Union.
3. In evaluating the good repute of the persons controlling the insurance
undertaking as well as the good repute, professional qualifications and experience of the
members of its supervisory and management bodies, the Supervisory Commission shall
consult the institutions referred to in paragraphs 1 and 2 of this Article about the
circumstances significant for evaluation of good repute, professional qualifications and
experience and must provide to other authority institutions the information about these
persons necessary for the purposes of the functions performed of the above-mentioned
authorities.
Article 17. Information about Changes
The insurance undertaking must, according to the licensing procedure established
by the Supervisory Commission, inform the Supervisory Commission about changes in the
information provided in the documentation submitted for issuance of the licence for
insurance activity.
Article 18. Change of a Licence to Engage in Insurance Activity
The insurance undertaking intending to engage in insurance activity of yet another
insurance class or sub-classes belonging to the same insurance class or to expand the
current activity to insurance of all the risks of the same insurance class, or a life assurance
undertaking intending to engage in activity of non-life insurance classes referred to in
subparagraphs 1 and 2, paragraph 3, Article 7 of this Law, must, according to the licensing
procedure established by the Supervisory Commission, apply the Supervisory Commission
seeking change of the licence. The Supervisory Commission shall make a decision
concerning the change of the licence within one month of the submission of the required
documentation as set out in the licensing procedure.
Article 19. Suspension and Withdrawal of the Licence to Engage in Insurance
Activity
1. On the grounds specified in paragraph 1, Article 198 of this Law, the
Supervisory Commission shall have the right to suspend validity of the license to engage
in insurance activity.
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2. The Supervisory Commission shall have the right to withdraw the licence to
engage in insurance activity where:
1) the insurance undertaking no longer meets the requirements under which the
licence for insurance activity has been issued;
2) the insurance undertaking has committed a gross violation of legal acts;
3) the insurance undertaking has applied for revocation of the licence for insurance
activity;
4) the insurance undertaking does not commence its engagement in insurance or
related activity within 12 months following issuance of the licence for insurance activity;
5) the insurance undertaking has not been engaged in insurance or related activity
for more than 6 months;
6) the insurance undertaking has failed to carry out the plans for the restoration of
its financial position set out in Article 40 of this Law;
7) in the case specified in paragraph 12 Article 12 of this Law.
3. The Supervisory Commission shall notify other competent authorities of the
other European Union Member States about its decision to withdraw the licence for
insurance activity.
4. Having withdrawn the licence for engagement in insurance activity, the
Supervisory Commission must take all possible measures to protect the interests of the
policyholders, the insured, beneficiaries, and the injured party and shall have the right,
after duly notifying the competent authorities of the European Union Member State where
the insurance undertaking is carrying out insurance business, seize the assets from which
technical provisions of the insurance undertaking are covered. The Supervisory
Commission shall have the right to ask that the competent authorities of the European
Union Member State where the insurance undertaking is carrying out its insurance
business, impose analogous restrictions on the insurance undertaking in that European
Union Member State.
5. The decision to withdraw the licence to engage in insurance activity must be
fully substantiated. The Supervisory Commission shall, without delay, inform the
insurance undertaking about the decision and its motivation in writing.
SECTION TWO
MANAGEMENT OF INSURANCE UNDERTAKING
Article 20. General Provisions
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1. Shareholders as well as the supervisory and managing bodies of an insurance
undertaking must ensure a transparent, sound and prudent management of the insurance
undertaking as well as the internal control of the activities of the insurance undertaking,
while the head of the administration must ensure transparent, sound and prudent
accounting procedures of the insurance undertaking.
2. An insurance undertaking must have a general shareholders’ meeting, the board,
and the head of the administration.
3. Founders and persons controlling the insurance undertaking, the participating
companies must be of good repute, while the members of the supervisory and management
bodies as well as the head of administration of the insurance controlling/holding company
must be of good repute, professionally qualified and experienced. Where one or several
founders of the insurance undertaking decide to transfer shares to other persons prior to
receipt of the licence for insurance activity, the transfer shall be subject to the provisions
of Article 22 of this Law, and the term set out in paragraph 1, Article 15 of this Law shall
be extended as specified in paragraph 4, Article 22 of this Law.
4. Members and the chairman of the supervisory board, members and the chairman
of the board, the head of the administration, the chief financier, the chief actuary and other
senior officers of the administration of the insurance undertaking as set out in the articles
of association or internal regulations of the insurance undertaking must be of good repute,
qualifications and experience.
5. Members and the chairman of the supervisory board if such has been formed,
members and the chairman of the board, the head of the administration must be elected,
while the persons who will hold the posts of the chief financier and the chief actuary of the
insurance undertaking must be selected before the insurance undertaking is to be granted
the licence for insurance activity.
Article 21. Transparent, Sound and Prudent Management of the Insurance
Undertaking
1. The organisational structure and the management system of an insurance
undertaking must ensure a transparent, sound and prudent management of activity of the
insurance undertaking.
2. In order to ensure a transparent, sound and prudent management, the articles of
association or other internal regulations, the insurance undertaking must:
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1) establish in a clear and transparent manner the internal structure of the insurance
undertaking, procedures for selection of its employees, their functions, rights, obligations
and responsibilities;
2) define and establish in a clear and transparent manner the functions, rights,
obligations, responsibility, accountability, of the members of the supervisory board and the
management board, the chairman of the board, the head of the administration, the chief
actuary, the internal audit service/internal auditor, and senior officers of the administration,
their decision making powers, relations, principles and rules of communication and cooperation.
3) clearly define the competence of the supervisory and managing bodies and
senior administrative staff so as to ensure balance of functions, rights, and obligations in
order to prevent unrestricted powers achieved by any single person in the decision making
process;
4) must ensure that the board of the insurance undertaking is prevented from undue
influence of the administration. Where the chairman of the board is also the head of
administration, the insurance undertaking shall ensure that the administration is
accountable to the board;
5) must ensure that the annual report of the insurance undertaking provides a
transparent, sound and prudent compliance with the principles of management and is in
line with the overall objectives of the undertaking;
6) must design, maintain, and use an efficient and comprehensive management
information system so that relevant information is provided in due time to the board and
the head of the administration and that prudent and sound management and control of the
undertaking is ensured;
7) establish money laundering prevention measures as well as measures for
recognition and prevention of other violations of laws.
3. The Supervisory Commission shall have the right to establish mandatory
instructions and guidelines concerning the issues of a transparent, sound and prudent
management.
Article 22. Transfer of the Shares of the Insurance Undertaking
1. Any person or closely related persons who intend to transfer shares of the
insurance undertaking must duly notify the Supervisory Commission and specify the
number of shares to be transferred as well as the future owner of the shares, where:
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1) it is intended to transfer the shares in the amount equal to or exceeding 10 per
cent of the authorised capital of the insurance undertaking;
2) the shares to be transferred shall reduce the amount of own shares in such a way
that after the transfer it will be less than 10 per cent, 20 per cent, 33 per cent or 50 per cent
of the authorised capital or will reduce the number voting rights held by the general
shareholders' meeting in such a way that after the transfer of the shares the number will be
less than 10 per cent, 20 per cent, 33 per cent or 50 per cent of all the voting rights, or
where following the transfer of shares the insurance undertaking will terminate to be a
subsidiary of the transferor.
2. Any person or persons in close links who intend to acquire shares of an
insurance undertaking must obtain an authorisation from the Supervisory Commission
where:
1) it is intended to acquire shares of an insurance undertaking in the amount that is
equal to or in excess of 10 per cent of the authorised capital of the insurance undertaking,
or shares granting 10 per cent or more of all the voting rights held by the general
shareholders’ meeting of the insurance undertaking;
2) the shares that are intended to be acquired will increase the number of shares
owned up to 10 per cent, 20 per cent, 33 per cent or 50 per cent or more of the authorised
capital of the insurance undertaking, or will increase the number of all the voting shares
held by the general shareholders’ meeting of the insurance undertaking, or if the insurance
undertaking which acquires the shares becomes a subsidiary of the acquirer.
3. An authorisation for the acquisition of shares of the insurance undertaking shall
be issued according to the procedures established by the Supervisory Commission to a
person or a closely related group of persons. Where at least one person of a group of
persons intends to acquire shares of an insurance undertaking, it shall be considered that
whole group of closely related persons intends to acquire shares.
4. Within three months after the date of submission of request for the acquisition of
shares of an insurance undertaking and of all the accompanying documents, the
Supervisory Commission shall make a decision on issue of an authorisation for the
acquisition of shares of an insurance undertaking and shall duly notify the applicant in
writing.
5. The Supervisory Commission shall have the right to refuse to grant an
authorisation for the acquisition of shares of an insurance undertaking only where:
1) the documents listed in the Supervisory Commission’s resolution or required in
the prescribed manner by this Law and legal acts have not been submitted, or where the
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documents submitted are not in compliance with the requirements provided in the legal
acts of the Republic of Lithuania;
2) upon the acquisition of shares, the persons who are to control the insurance
undertaking, and the companies which are to participate in do not meet the criteria
provided in paragraph 3, Article 20 of this Law and/or, according to the results of their
activities, the provisions of legal acts and other important circumstances, their financial
position is not stable and sound;
3) it is intended to acquire shares for financial resources of illegal origin;
4) upon the acquisition of shares of an insurance undertaking, an effective
supervision will be impossible owing to the structure of the group to which the insurance
undertaking belongs;
5) acquisition of shares is in conflict with the provisions of other laws.
6. Where the person who intends to acquire shares of an insurance undertaking is
an insurance undertaking, a credit institution or a company of a financial broker of another
Member State of the European Union, a parent undertaking of an insurance undertaking, a
credit institution or a company of a financial broker of another Member State of the
European Union, or a controlling person of an insurance undertaking, a credit institution or
a company of a financial broker of another Member State of the European Union, and if
upon the acquisition of shares, the insurance undertaking becomes a subsidiary or an
undertaking controlled by this person, the Supervisory Commission must, before granting
an authorisation for the acquisition of shares, consult the institutions specified in Article 16
of this Law.
7. When granting an authorisation for the acquisition of shares of an insurance
undertaking the Supervisory Commission shall have the right to set a term for the
acquisition of shares of an insurance undertaking.
8. The transaction under which persons acquire shares of an insurance undertaking
without holding an authorisation granted by the Supervisory Commission provided for in
paragraph 2 of this Article shall be invalid. All claims relating to the consequences of this
transaction shall be heard by a court of the Republic of Lithuania of the area of the
headquarters of the insurance undertaking.
9. Insurance undertakings must notify the Supervisory Commission following the
procedure prescribed by it about any changes of the shareholders of insurance
undertakings.
10. When it is suspected that the shares of an insurance undertaking may be paidup from financial resources of an illegal origin, the Supervisory Commission must apply to
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the State Security Department seeking its conclusion about the origin of said financial
resources. In this case, the term specified in paragraph 4 of this Article shall be suspended
and shall be renewed after receipt of the conclusion from the State Security Department.
Article 23.Supervisory Board
1. If a supervisory board is formed at an insurance undertaking, the insurance
undertaking must, after election of the members and the chairman of the supervisory
board, furnish information within 10 days about these persons to the Supervisory
Commission in the form established by it.
2. The supervisory board of an insurance undertaking, apart from the functions
prescribed in other laws or articles of association, shall appoint and dismiss the head of the
internal audit service or the internal auditor and shall formulate methodological
instructions for their activity. Where the supervisory board is not formed, its functions
shall be performed by the board of the insurance undertaking.
Article 24. Board of the Insurance Undertaking
1. Before members and the chairman of the Management Board of the insurance
undertaking are elected, the insurance undertaking must submit information to the
Supervisory Commission in the form established by it and receive approval of the
Supervisory Commission for the of persons seeking to take said positions. The
Supervisory Commission shall adopt the decision on the approval of the candidates within
30 working days.
2. In addition to other functions specified in the laws or the articles of associations,
the board of the insurance undertaking shall perform the following functions:
1) determine the strategic objectives of the insurance undertaking, measures aimed
at achieving these objectives, and the procedure for monitoring of the measures and the
evaluation of the results;
2) determine and inspect an independent risk management strategy of the insurance
undertaking related to the activity carried out by the insurance undertaking, in particular,
to the identification, evaluation, monitoring and control of the transactions referred to in
Article 50 of this Law;
3) establish the procedure for conclusion of insurance contracts which shall also be
applicable to dependent insurance intermediaries, by paying particular attention to the
disclosure of information, which is material when concluding an insurance contract, to the
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policyholders, respect for and protection of interests each policyholders, and ensure that
standard insurance policy conditions are in line with the legislative provisions;
4) establish the procedure for the reporting of insured events and events which
could be recognised as insured events as well as the procedure for accounting of the results
of investigation of the reports as well as the rules for the investigation of insured events
and events which could be recognised as insured events;
5) establish the procedure for the examination of complaints submitted by the
policyholders, insured persons, beneficiaries, and injured party as well as the procedure for
giving a response to applicants; this procedure must be publicly announced on the Internet
website of the undertaking and be provided upon request of any interested person after
paying a fee for the service;
6) having ascertained that the candidates are of good repute, adequate professional
qualifications and experience, shall appoint and recall the head of the administration, the
chief financier, and the chief actuary;
7) determine the procedure for remuneration of the head of the administration, the
chief financier, and the chief actuary;
8) determine the procedure for ascertaining that the persons seeking senior
positions in the insurance undertaking are of good repute, adequate professional
qualifications and experience, and ensure that the staff who make decisions on investment
and/or assets management are of good repute, adequate professional qualifications and
experience;
9) carry out the instructions and guidelines of the Supervisory Commission aimed
at effective, transparent, sound and prudent management of the insurance undertaking.
3. Before election of the head of the administration of the insurance undertaking is
elected, the board of the insurance undertaking must submit to the Supervisory
Commission information in the form established by the Commission and obtain the
approval of the Supervisory Commission for the nominee to the position of the head of
administration. The Supervisory Commission shall make the decision concerning the
approval of the candidate within 30 working days.
4. Having appointed the chief financier and/or the chief actuary, the board of the
insurance undertaking must, within 10 days, submit the information about these persons to
the Supervisory Commission in the form established by it.
Article 25. Chief Actuary
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1. An insurance undertaking must have its chief actuary – a mathematician in the
insurance field. The chief actuary of an insurance undertaking must:
1) ensure that insurance premiums of the insurance undertaking are calculated and
the technical provisions are made according to the principles and requirements established
or recognised by legal acts;
2) inspect whether the insurance undertaking is able, at any moment, to carry out
its obligations arising from insurance contracts, and if the insurance undertaking complies
with the solvency margin requirements set forth in the legal acts, appraise the effect of the
transactions specified in Article 50 of this Law on the solvency of the insurance
undertaking;
3) seek that the coverage of the technical provisions by assets is in compliance with
the nature of activity of the insurance undertaking and the requirements set forth in legal
acts; make proposals on this issue to the board of the insurance undertaking;
4) seek that the reinsurance strategy of the insurance undertaking is adequate for
the management of the assumed insurance and reinsurance risks at any moment and is in
compliance with the requirements established by legal acts; make proposals on this issue
to the board of the insurance undertaking;
5) make proposals to the board on the profit distribution of the insurance
undertaking to the policyholders who have concluded life assurance contracts under which
they are entitled to a share of profit of the insurer;
6) submit, at least once every quarter, reports to the board of the insurance
undertaking in the form prescribed by it on the cover of technical provisions of the
insurance undertaking and the state of solvency margin;
7) submit reports to the Supervisory Commission in the form prescribed by it;
8) observe the code of professional ethics approved by the actuaries’ professional
organisation.
2. Having identified a threat that the insurance undertaking may, at any moment,
become unable to carry out its obligations arising from insurance or reinsurance contracts,
the chief actuary must immediately inform the board of the undertaking; if the latter does
not take measures forthwith to improve the situation, to inform the Supervisory
Commission.
3. The chief actuary of the insurance undertaking shall have the right to get all the
information necessary for him to perform his functions from the supervisory board, the
board, the head of the administration, the chief financier, the internal audit service or the
internal auditor.
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4. When carrying out his obligations, the chief actuary of the insurance undertaking
shall be accountable only to the board of the insurance undertaking. Other bodies of the
insurance undertaking shall be prohibited from interfering in the activities of the chief
actuary.
5. Other rights, obligations, and responsibility of the chief actuary of the insurance
undertaking shall be established by the actuary’s work regulations subject to the approval
of the board of the insurance undertaking.
Article 26. Internal Control of the Insurance Undertaking
1. Internal control of the activity of an insurance undertaking must be ensured by a
reliable and effective system of internal control.
2. An insurance undertaking must have a service of internal audit or an internal
auditor. These functions may be performed not only by a separate unit of the insurance
undertaking or an employee, but also by the person with whom the insurance undertaking
has concluded a contract of internal audit.
3. The system of internal control of the activity of an insurance undertaking shall
be based on:
1) the organisational structure enabling to ensure vertical and horizontal relations;
2) the internal information system;
3) responsibility and competence of the personnel provided for in the internal
regulations of the insurance undertaking;
4) sound internal control of operating procedures aimed at ensuring separation of
obligations and the duty to sign financial documentation by two persons established in the
internal regulations;
5) the information system for shareholders, supervisory and managing bodies;
6) risk management;
7) professional qualifications, experience, good repute of the internal audit
service/internal auditor, and adequate funding allocated for carrying out direct functions of
the internal audit service/internal auditor.
4. The internal audit service/internal auditor shall perform exercise the following
functions:
1) ascertain whether financial statements of the insurance undertaking show reflect
the actual state results of the activities of the insurance undertaking;
2) verify compliance with legal acts, articles of association of the insurance
undertaking, resolutions of the supervisory board and the board of the insurance
32
undertaking, orders of the head of the administration, and other internal regulations and
their implementation;
3) inspect how contracts specified in Article 50 of this Law are identified,
evaluated, monitored and controlled;
4) verify and appraise appropriateness and efficiency of the internal control system
of the insurance undertaking;
5) appraise effectiveness of the activity, strategic goals and the means aimed at
achieving these goals of the insurance undertaking;
6) put forward proposals to the supervisory board and the board concerning
resolutions of the board, make recommendations to the board and the head of the
administration on the issues of management and activity of the insurance undertaking,
organisation of activity of its structural divisions and its efficiency; report to the
supervisory board on the implementation of said recommendations.
5. The internal audit service/internal auditor must inform forthwith the supervisory
board of the insurance undertaking and the latter failing to take measures to improve the
situation, also the Supervisory Commission about the discovered breaches of the
legislation of the Republic of Lithuania and other legal acts which jeopardise the interests
of the policyholders, insured, beneficiaries, and injured party as well as the safe and
credible functioning of the insurance undertaking.
6. The internal audit service or the internal auditor shall have the right to get all the
information necessary for the exercise of their functions from the supervisory and
managing bodies of the insurance undertaking, the head of the administration, the chief
financier, the chief actuary, and other members of the administrative personnel of the
insurance undertaking.
7. When carrying out their obligations, the internal audit service or the internal
auditor shall be accountable only to the supervisory board of the insurance undertaking.
The internal audit service or the internal auditor must be independent of the audited entity
and they may not be subjected to any interference when determining the scope of the
internal audit, when carrying out the audit and when submitting its findings.
8. Other rights, obligations, and responsibility of the internal audit service or the
internal auditor of the insurance undertaking shall be established by the regulation of the
internal audit service/the internal auditor which shall be subject to the approval of the
supervisory board. The Supervisory Commission shall have the right to give mandatory
instructions and recommendations concerning establishment of the rights and obligations
of the internal audit service or the internal auditor of the insurance undertaking.
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9. Where an insurance undertaking has no supervisory board, the functions, rights
and obligations of such a board as specified in this Article shall be performed by the board
of the insurance undertaking.
Article 27. Outsourcing Contracts of the Insurance Undertaking
1. When concluding outsourcing contracts on the valuation of property to be
insured by the insurance undertaking, conclusion of insurance contracts, administration of
insured events, management of investments and/or assets, accounting, administration of
databases, internal audit, and other contracts determined by the Supervisory Commission,
the insurance undertaking must:
1) make sure that the other party to the contract is of good repute, adequate
professional qualifications and experience;
2) have a clause in the contract providing for the right to obtain from the other
party to the contract all the information relating to the activity carried out under the
contract by that party;
3) have a clause in the contract providing for the right to give mandatory
instructions to the other party to the contract relating to the activity carried out under the
contract by that party.
2. The insurance undertaking must inform the Supervisory Commission about the
contracts referred to in paragraph 1 of this Article in the manner established by the
Supervisory Commission.
3. The insurance undertaking shall be responsible for violations of the legal acts
regulating insurance activity, irrespective of the contracts specified in paragraph 1 of this
Article.
4. The Supervisory Commission, upon discovering that an obstacle for an effective
supervision of the insurance undertaking arises or that legislative provisions or the
interests of policyholders, insured persons, or beneficiaries have been violated as a result
of the contracts specified in paragraph 1 of this Article, shall have the right to obligate the
insurance undertaking to rectify the situation or to require that the insurance undertaking
itself performs the activities which under the contracts specified in paragraph 1 of this
Article had to be performed by other persons.
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Article 28. Branches of Insurance Companies
Branches of the insurance undertaking shall be established in the Republic of
Lithuania and in foreign countries following the procedure prescribed by the Supervisory
Commission subject to an authorisation to establish a branch.
Article 29. Limitations on the Conflict of Interests
1. The head of the administration of an insurance undertaking may not perform the
functions of a member of the supervisory board, the chief financier, the chief actuary, or be
a member of the supervisory board or the board of another insurance undertaking, or work
in the administration of another insurance undertaking; however, the head of the
administration of the parent insurance undertaking shall have the right to be a member of
the supervisory board and a member of the board of a subsidiary; and the head of the
administration of a subsidiary shall have the right to be a member of the supervisory board
and a member of the board of the parent insurance undertaking.
2. The internal auditor or an auditor of another insurance undertaking may not be a
member of the supervisory board or a member of the board of the insurance undertaking.
3. An audit firm with which the insurance undertaking has concluded an audit
contract may not be the internal auditor of the insurance undertaking.
4. The members of the bodies of an insurance undertaking shall also be subject to
limitations of the conflict of interests set out in other laws of the Republic of Lithuania.
CHAPTER THREE
FINANCES OF INSURANCE COMPANIES
Article 30. Organisational Fund
1. The founders, a legal person/persons which is being reorganised into an
insurance undertaking or which is changing its activities into the activities of an insurance
undertaking must form an organisational fund of financial resources intended for the
expenses of founding, reorganisation into an insurance undertaking, or changing of type of
activities.
2. The organisational fund must amount to the minimum of EUR 300 000.
3. The organisational fund must be formed of financial resources only.
4. The organisational fund may not be formed of borrowed financial resources or
resources of an illegal origin.
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Article 31. Authorised Capital
1. The authorised capital of an insurance undertaking may not be less than EUR 1
000 000.
2. The articles of association which are amended due to the increase or decrease of
the authorised capita must be approved, following the procedure prescribed by the
Supervisory Commission, by the Supervisory Commission before the insurance
undertaking communicates information about the amendments to the Register of Legal
Persons. The Supervisory Commission shall adopt a decision on the approval of the
amendments to the articles of association within 20 days of submission of all the relevant
documents. Increase of the authorised capital may be registered, according to the
procedure prescribed by law, only when the shares have been fully paid-up.
3. An insurance undertaking may have only registered shares. The shares of an
insurance undertaking must be paid-up only in cash.
4. The share of an insurance undertaking may not be paid-up by borrowed financial
resources nor by financial resources of an illegal origin.
Article 32. Own and Borrowed Capital
1. The composition of own capital of an insurance undertaking shall be regulated
by the Law on Companies; upon registration of the insurance undertaking as well as the
amendments related to the changing of the undertaking’s activity at the Register of Legal
Persons, the balance of the organisational fund shall be attributed to the mandatory
reserve.
2. The borrowed capital of an insurance undertaking shall be composed of:
1) insurance technical provisions;
2) reinsurers’ deposits;
3) other commitments;
4) accumulated expenses and receivables.
Article 33. Scheme of Operations
1. An insurance undertaking must conduct its business on the scheme of operations.
The insurance undertaking must notify the Supervisory Commission about the intended
changes in the scheme of operations and get approval for them according to the procedure
prescribed by the Supervisory Commission.
36
2. The contents and form of the scheme of operations as well as the procedure for
submitting it shall be established by the Supervisory Commission.
Article 34. Technical Provisions
1. Following the procedure prescribed by the Supervisory Commission an
insurance undertaking must form sufficient technical provisions and guarantee that they
are represented by matching assets.
2. Following the procedure set by the Supervisory Commission insurance
undertakings shall form the following technical provisions:
1) unearned premiums technical provision;
2) life insurance mathematical technical provision;
3) outstanding claims technical provision;
4) technical provision for bonuses and rebates;
5) equalisation technical provision;
6) other insurance technical provisions.
Article 35. Assets Covering Technical Provisions
1. By accumulation of assets covering insurance technical provisions undertakings
have to take into consideration the type of business carried on by a undertaking and aim to
guarantee safety, liquidity, diversification, time matching and profitability of investment.
2. Insurance technical provisions must be covered by the assets that are expressed
in the currency which determines the undertaking’s obligations that are set in the insurance
and reinsurance contracts, following currency matching rules set by the Supervisory
Commission.
3. Only the assets of the groups listed below may cover insurance technical
provisions:
1) securities of the Government, the central bank and municipality;
2) real estate;
3) term deposits at banks;
4) loans guaranteed by immovable property;
5) mortgage bonds;
6) shares admitted to the official listing on the stock exchange or on a trading list of
a regulated market;
37
7) shares not admitted to the official listing on the stock exchange or on a trading
list of a regulated market, provided that there is an authorisation from the Supervisory
Commission;
8) debentures of undertakings admitted to the official listing on the stock exchange
or on a trading list of a regulated market;
9) debentures of undertakings not admitted to the official listing on the stock
exchange or on a trading list of a regulated market, provided that there is an authorisation
from the Supervisory Commission;
10) shares of variable capital investment companies and investment units of
investment funds;
11) derivative financial instruments, provided that there is a authorisation from the
Supervisory Commission;
12) other investments set by the Supervisory Commission, provided that an
authorisation from the Supervisory Commission has been obtained in the cases set by the
Supervisory Commission;
13) cash in the settlement account and on hand.
4. The portion of a premium that has not been required to be paid as well as the
reinsurers’ share of technical provisions may be covered by:
1) insurance and reinsurance premiums that have not been required to be paid;
2) reinsurers’ debts;
3) other assets specified in paragraph 3 of this Article.
5. The Supervisory Commission shall have the right to limit, for a motivated cause,
the investments covering technical provisions:
1) into shares and debentures of closely linked undertakings;
2) into shares and debentures of undertakings, whose shares have been acquired by
members of the supervisory board, the board or the head of administration of an insurance
undertaking or in whose supervisory or management bodies members of the supervisory
board and the board of the insurance undertaking hold positions;
3) which may undermine the financial stability of an insurance undertaking or have
any other negative impact on the activity of an insurance undertaking, the interests of the
policyholders, insured, beneficiaries and/or injured party.
6. The Supervisory Commission shall determine the procedure for covering
technical provisions with assets, its conditions, limitations and currency matching rules.
7. An insurance undertaking must administer the list of assets covering insurance
technical provisions following the procedure set out by the Supervisory Commission. The
38
court when applying temporary security measures, or any other state institutions applying
sanctions related to the assets registered in this list, must obtain an opinion of the
Supervisory Commission on the potential consequences of temporary security measures or
sanctions for the financial position of the insurance undertaking as well for the interests of
the policyholders, insured, beneficiaries and injured party. The Supervisory Commission
must furnish its opinion conclusion to the court within 24 hours.
Article 36. Failure to Meet Requirements for Formation of Technical
Provisions and Their Cover by Assets
1. If an undertaking fails to meet the requirements for formation of technical
provisions and their cover by assets, the Supervisory Commission, after a prior notification
of the competent authority of the European Union Member State within which the
insurance risk is situated, or other competent authority of the European Union Member
State of the commitment, shall have the right to seize the assets of the insurance
undertaking which cover technical provisions.
2. Exercise of the right referred to in paragraph 1 of this Article by the Supervisory
Commission right does not prevent the Supervisory Commission from application of other
sanctions provided by this Law.
Article 37. Reinsurance
1. A licence of insurance activity shall grant the right to an insurance undertaking
to engage in reinsurance.
2. Insurance undertakings may engage in reinsurance in those insurance classes in
which they are carrying out insurance activity following the procedure set out in this Law.
3. Reinsurance activity carried out by an insurance undertaking shall be subject to
the requirements analogous to those of formation of technical provisions, property cover
and accounting as well as other requirements set for carrying out insurance activity in an
insurance class.
Article 38. Ceded Reinsurance
1. Insurance undertakings shall have the right to cede (transfer a part of assumed
risk) by concluding insurance contracts only with persons listed in Article 4 of this Law.
2. The aim of ceded reinsurance may be reduction of losses owing to an assumed
risk, reduction of the required solvency margin, a more effective use of capital held or
extension of possibilities to assume other insurance risks.
39
3. With regard to the assumed risks, an insurance undertaking must, at any
moment, have sufficient ceded reinsurance.
4. An insurance undertaking shall choose a reinsurer according to its own reinsurance
strategy, which is subject to approval by the board of an insurance undertaking at least
once a year, while life assurance undertakings – at least once every three years – covering
all assumed insurance risks. Ceded reinsurance strategy must embrace:
1) types and scope of reinsurance contracts of the ceded reinsurance
programme as well as the amounts of the risk assumed by the insurance undertaking;
2) criteria for the choice of the reinsurer and/or a certified list of reinsurers;
3) the principles of internal control of the reinsurance programme.
5. When choosing a reinsurer an insurance undertaking must follow a principle of
safety and must possess sufficient information about the reinsurer.
6. The Supervisory Commission shall have the right to set requirements for
reinsurance and the criteria for the choice of a reinsurer which must be followed by an
insurance undertaking.
7. At the request of the Supervisory Commission an insurance undertaking must
submit its reinsurance strategy, draft reinsurance contracts or the contracts proper. The
Supervisory Commission shall have the right to task an insurance undertaking to revise or
cancel the concluded insurance contracts where the requirements for reinsurance and the
criteria for the choice of a reinsurer as set out by the Supervisory Commission have been
breached.
Article 39. Solvency Margin
1. Throughout the whole period of its economic commercial activity each
insurance undertaking must maintain an adequate solvency margin: the available solvency
margin must not be less than the required solvency margin, and the guarantee fund must
not be less than the minimum guarantee fund. Solvency margin shall be calculated
according to the procedure established by the Supervisory Commission.
2. A portion of the available solvency margin equal to the larger of the following
amounts - the minimum guarantee fund or 1/3 of required solvency margin - shall
comprise the guarantee fund.
3. The minimum guarantee fund shall be equal to:
1) EUR 2 000 000 for an insurance undertaking engaged in non - life insurance
activity;
2) EUR 3 000 000 for an insurance undertaking engaged in life assurance activity;
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3) EUR 3 000 000 for an insurance undertaking engaged in at least one of the
activity of insurance risks in the insurance classes specified in subparagraphs 10, 11, 12,
13, 14 and 15, paragraph 3, Article 7 of this Law.
4. Amount of the minimum guarantee fund shall be indexed according to the
procedure established by the Supervisory Commission.
Article 40. Plans for Restoration of Financial Situation
1. An insurance undertaking which breaks the requirements for solvency margin must
forthwith inform the Supervisory Commission.
2. At the request of the Supervisory Commission an insurance undertaking must
increase, without delay, the available solvency margin or, following the procedure
prescribed by the Supervisory Commission, submit to the Supervisory Commission a plan
of a prescribed form for the recovery of the financial health of the insurance undertaking.
3. In certain cases, where there is a threat that the financial situation of an
insurance undertaking may deteriorate even more considerably, the Supervisory
Commission, upon a prior notification to the competent authority of another European
Union Member State where the insurance undertaking is carrying out its activity, shall
have the right to seize the assets of the insurance undertaking covering its technical
provisions. The Supervisory Commission shall have the to ask the competent authority of
another European Union Member State where the insurance undertaking is carrying out its
activity to set analogous restrictions in another European Union Member State.
4. The Supervisory Commission shall have the right to set requirements for a
short-term plan of restoration of financial soundness as well as its method of presentation.
5. At the request of the Supervisory Commission, insurance undertakings must
revise their plans of restoration of financial soundness. Plans of restoration of financial
soundness approved by the Supervisory Commission shall be obligatory to insurance
undertakings.
6. Where a plan of restoration of financial soundness is not submitted in good
time or is not being implemented, the Supervisory Commission must take all necessary
sanctions including seizure of assets covering technical provisions and shall have the right
to revoke the licence for insurance activity.
7. If due to specifics of an insurance undertaking activity and insufficiency of
application of standard solvency requirements as provided by legal acts, there is a threat
that interests of the policyholders, insured, beneficiaries or injured party will not be
satisfied, the Supervisory Commission has a right to require the insurance undertaking to
41
have higher than minimal solvency margin, which is set by acts of law, by increasing
requirements for the required solvency margin in order the insurance undertaking could
satisfy solvency margin requirements in the nearest future.
8. Where, due to the deterioration of the financial situation of the insurance
undertaking, the interests of policyholders, insured persons, beneficiaries or any injured
party are under a threat, the Supervisory Commission shall have the right to request the
insurance undertaking to improve its financial situation take measures in advance to ensure
the minimum solvency margin.
9. Provisions of this Article shall not preclude the Supervisory Commission
from resorting to any other sanctions provided for in this Law.
Article 41. Transfer of Rights and Obligations Under Insurance Contracts
1. On the basis of a written agreement and upon obtaining an authorisation from
the Supervisory Commission an insurance undertaking shall have the right to transfer its
rights and obligations under insurance contracts to other insurance undertaking, an
insurance undertaking of another European Union Member State or a foreign insurance
undertaking branch established in the Republic of Lithuania or another European Union
Member State.
2. An insurance undertaking shall have the right to transfer its rights and
obligations under all insurance contracts or part of them which were concluded when
exercising the right of establishment or the right to provide services to an insurance
undertaking of another European Union Member State only where a competent authority
of this State confirms that after the transfer of rights and obligations, the required solvency
margin under the legal acts of this State will be preserved by of the transferee assuming the
rights and obligations.
3. If it is intended to transfer rights and obligations under insurance contracts of
a branch of an undertaking in an European Union Member State concluded when
exercising the right of establishment or the right to provide services, the Supervisory
Commission must obtain an opinion from a competent authority of the host country about
the transfer of rights and obligations.
4. An authorisation to transfer rights and obligations under insurance contracts
may be granted provided that the competent authority of another European Union Member
State within which the insurance risk is situated or the competent authority of another
European Union Member State of the commitment under a life assurance contract does not
object.
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5. If information specified in parts 2 , 3 and 4 of this Article is not received
within three months, it shall be considered that the competent authority of another
European Union Member State does not object to the transfer of rights and obligations
under insurance contracts.
6. A written contract on the transfer of rights and obligations must have a clause
that the transfer of rights and obligations shall be considered to have taken place from the
moment of publication of the authorisation for the transfer rights and obligations by the
Supervisory Commission in the supplement “Informaciniai pranešimai” to the state
gazette “Valstybės žinios”.
Article 42. Granting of Authorisation to Transfer Rights and Obligations
under Insurance Contracts
1. An insurance undertaking must announce about its intention to pass rights and
obligations under insurance contracts in at least in two daily newspapers circulated in
Lithuania and in another European Union Member State where the insurance undertaking
performs its activities. The announcement about the intention to transfer the rights and
obligations under insurance contracts specify the time period, not shorter than two months,
within which the policyholder shall have the right to express his objection in writing
against the intention of the insurance undertaking to transfer rights and obligations under
insurance contracts.
2. Where the insurance undertaking failed to fulfil the requirement specified in
paragraph 1 of this Article, the Supervisory Commission shall have the right to request that
the insurance undertaking announces about its intention once again or informs in writing
each policyholder thereupon individually.
3. At the end of the time period set in paragraph 1 of this Article the insurance
undertaking which plans to transfer its rights and obligations, must apply to the
Supervisory Commission seeking an authorisation for the transfer of the rights and
obligations under insurance contracts. The authorisation to transfer the rights and
obligations under insurance contracts shall be granted following the procedure set by the
Supervisory Commission within three months from the application if:
1) all the necessary documents and information under the procedure determined
by the Supervisory Commission for an authorisation for the transfer of the rights and
obligations under insurance contracts;
43
2) the transferee assumes all the rights and obligations arising from insurance
contracts;
3) after the transfer of the rights and obligations under insurance contracts the
required solvency margin of the transferees assuming these rights and obligations will be
retained at the level required by legal acts;
4) the transfer of the rights and obligations under insurance contracts shall not
have a negative effect upon the property interests of the policyholders, insured persons,
beneficiaries or any injured party of the insurance undertaking which transfers its rights
and obligations under insurance contracts;
5) there is no objection from the competent authorities of other European Union
Member State indicated in Article 40 of this Law to the transfer of the rights and
obligations under insurance contracts;
4. The Supervisory Commission when granting an authorisation must set the
time period within which the rights and obligations have to be transferred. The
authorisation for the transfer of the rights and obligations under insurance contracts must
be announced in the supplement “Informaciniai pranešimai” of the official gazette
“Valstybės žinios”.
5. The Supervisory Commission must also announce the transfer of the rights
and obligations under insurance contracts in another European Union Member State where
the insurance risk is situated or another European Union State of the commitment under a
life assurance contract following the requirements stipulated in the legal acts of that State.
6. If the policyholder objects to the transfer of the rights and obligations under
insurance contracts he shall have the right to terminate the insurance contract following the
procedure set out in the insurance contract within one month from the moment of the
transfer of the rights and obligations.
7. The rights and obligations under insurance contracts shall be transferred
together with the assets covering technical provisions. If tit is intended to transfer the
rights and obligations under insurance contracts without all the assets or part of the assets
covering technical provisions, the authorisation for the transfer of the rights and
obligations under insurance contracts may be granted only if the Supervisory Commission
approves a renewal plan of the assets covering provisions submitted following the
procedure determined by the Supervisory Commission.
Article 43. Accounts, Financial Statements and Audit
44
1. Insurance companies must keep financial accounting and draw up financial
statements pursuant to the laws, resolutions of the Supervisory Commission and other
legal acts and in accordance with the accounting policy chosen by the insurance
undertaking.
2. The accounting system of an insurance undertaking must be organised in such
way that:
1) financial statements would show the real financial situation of the insurance
undertaking;
2) it would provide conditions for safe and credible management and disposal
of the assets of the insurance undertaking;
3) it would provide conditions for the auditor company of the insurance
undertaking, the internal audit service/internal auditor of the insurance undertaking or
institutions authorised by law to inspect and evaluate the activities of the bodies of
supervision and administration of the insurance undertaking, its other employees
having powers to make decisions from which commitments of the insurance
undertaking to other persons arise, and the financial situation of the insurance
undertaking.
3. The Supervisory Commission shall determine the procedure for drawing up
and submitting financial statements, other financial and statistical reports of an insurance
undertaking.
4. The annual financial statement of the insurance undertaking must be verified
by an independent audit company having experience in the field of audit of insurance
undertakings and financial institutions. Within four months from the close of the financial
year the financial statement must be approved by the general shareholders’ meeting and
submitted to the Supervisory Commission.
5.Within ten days after choosing an audit company the insurance undertaking,
following the procedure determined by the Supervisory Commission, must inform the
Supervisory Commission about the audit company it has chosen. If the auditors lack
experience in audit of insurance undertakings and financial institutions, the insurance
undertaking has to find another audit company at request of the Supervisory Commission.
The same audit company may conduct audit at the same insurance undertaking not more
than for three years in succession.
6. An audit company shall have the following obligations when auditing financial
accounts of an insurance undertaking:
45
1) an audit company must inform the Supervisory Commission without delay
about the major violations of this Law and other legal acts regulating financial activity of
insurance companies that were identified during the inspection of financial statements of
the insurance undertaking, also the circumstances indicating that the insurance undertaking
no longer meets requirements which have to be met when issuing a licence for insurance
activity as well as the circumstances that cause or may cause threat to solvency and
financial stability of the insurance undertaking or to the interests of the policyholders,
insured persons, beneficiaries or any injured party;
2) an audit company must inform the Supervisory Commission in writing and
without delay about any circumstances owing to which it is refused to state the auditor’s
opinion to present an auditor account or auditor account is submitted provisory.
7. Under requirement of the Supervisory Commission, an audit company has to
present explanations regarding financial reports and information indicated in auditor’s
conclusions.
8. The audit company which audits an insurance holding company or a company
controlled by an insurance undertaking must inform forthwith the Supervisory
Commission about any circumstances indicated in paragraph 6 of this Article that are
discovered during the audit.
9. Fair disclosure of information by an audit company to the Supervisory
Commission about any circumstances indicated in this Article shall not be and may not be
a breach of the duty prescribed by legal acts or a contract on non-disclosure of information
and shall not incur nor may incur any form of liability.
10. Insurance undertakings must publish their annual financial statements
publicly and the auditor’s opinion following the procedure determined by the Supervisory
Commission.
11. The Supervisory Commission shall have the right to determine the procedure
for the publication of other reports.
CHAPTER FOUR
SUPPLEMENTARY SUPERVISION OF UNDERTAKINGS BELONGING TO
THE GROUP
Article 44. Application of Provisions of This Chapter
1. Provisions of this section shall apply to insurance undertakings and other
undertakings provided for in this Chapter.
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2. Apart from the general supervision requirements covered in this Chapter
supplementary supervision requirements set out in Articles 47, 48, 50 and 51 of this Law
shall apply to the insurance undertaking which is a participating undertaking at least in one
of any other insurance undertakings, an insurance undertaking of another European Union
Member State, an reinsurance undertaking or an insurance undertaking of a non-member
country.
3. Supplementary supervision requirements set out in Articles 47, 48, 50 and 52
of this Law shall apply to each insurance undertaking whose parent undertaking is an
insurance holding company, a reinsurance undertaking or an insurance undertaking of a
non-member country.
4. Supplementary supervision requirements set out in Articles 47, 48 and 50 of
this Law shall apply to any insurance undertaking whose parent undertaking is a mixedactivity insurance holding company.
5. The rights and obligations of insurance undertakings belonging to a group
including credit institutions, financial broker undertakings or other financial institutions as
well as the rights and obligations of the Supervisory Commission in supervising groups of
such undertakings shall be regulated by the Law on Financial Institutions. Provisions of
this Chapter shall also apply to these undertakings.
Article 45. Extent of Supplementary Supervision
1. When exercising supplementary supervision, the following shall also be taken
into account:
1) undertakings related to the insurance undertaking;
2) participating undertakings of the insurance undertaking;
3) undertakings related to the participating undertakings of the insurance
undertaking;
2. Supplementary supervision does not mean that the Supervisory Commission is
supervising the undertakings listed in paragraph 1 of this Article; however, the
requirements provided for in this Chapter shall apply to said undertakings.
3. In exercising supplementary supervision, the Supervisory Commission may not take
account of undertakings of non-member countries there are legal obstacles to obtaining
information. This shall be taken into consideration when calculating the adjusted solvency
margin in accordance with the procedure determined by the Supervisory Commission.
4. The Supervisory Commission shall have the right to decide in each
individual case whether to apply supplementary supervision requirements where:
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1) an undertaking, which would be taken into consideration while exercising
supplementary supervision, is insignificant for the goals of supplementary supervision of
insurance undertakings;
2)
application
of
supplementary
supervision
requirements
would
be
unreasonable or misleading having regard to goals of supplementary supervision of
insurance undertakings.
Article 46. Competent Authorities
1. Supplementary supervision shall be exercised by a competent authority which
has granted a license for insurance activity.
2. If a parent undertaking of an insurance undertaking and of one other or more
insurance undertakings of another European Union Member State is the same insurance
holding company, a reinsurance undertaking, an insurance undertaking of a non-member
country or a mixed-activity insurance holding company, a competent authority responsible
for supplementary supervision shall be determined by agreement of the Supervisory
Commission with other supervision authorities of insurance undertakings of the European
Union Member States. Under this agreement the Supervisory Commission may be
assigned to exercise supplementary supervision.
3. If supplementary supervision the responsibility of a competent institution of
another European Union Member State, it shall have the same rights to get access to
information in respect of insurance undertakings and entities which are subject to
supplementary supervision in the Republic of Lithuania as the Supervisory Commission.
Article 47. Internal Control and Right to Access Information
1. Every insurance undertaking to which supplementary supervision is applied
must have an adequate system of internal control to ensure gathering and provision of data
and information necessary for supplementary supervision.
2. Entities listed in paragraph 1 of Article 45 of this Law having their office in
the Republic of Lithuania, at the request of the insurance undertaking to which
requirements of supplementary supervision apply, must provide to it all the information
essential for supplementary supervision and shall have the a right to request such
information from the insurance undertaking itself which must furnish it.
Article 48. Right of the Supervisory Commission to Information
48
1. The Supervisory Commission shall have the right to apply directly to the
undertakings listed in paragraph 1, Article 45 of this Law with a request to be provided
information essential for supplementary supervision only where an insurance undertaking
itself failed to provide such information to the Supervisory Commission.
2. The Supervisory Commission shall have the right to verify the information
indicated in paragraph 1 of this Article itself or with the help of persons invited for that
purpose in the course of inspection:
1) at the insurance undertaking which is subject to the requirements of
supplementary supervision;
2) at the subsidiaries of that undertaking;
3) at the parent undertakings of that undertaking;
4) at the other subsidiaries of the parent company of the insurance undertaking.
Article 49. Co-operation
1. Where insurance undertakings and insurance undertakings of another
European Union Member State are directly or indirectly closely related or have a common
participating undertaking, the Supervisory Commission, at the request of a competent
authority of another European Union Member State, must provide information which may
be essential for supplementary supervision, or shall have the right, on its own initiative, to
provide information that could be essential for the competent authority of another
European Union Member State.
2. When the insurance undertaking and credit institutions or financial broker
undertakings, or those credit institutions and financial broker undertakings are directly or
indirectly related or have a common participating undertaking, the Supervisory
Commission must collaborate with relevant authorities of the Republic of Lithuania or
another European Union Member State or a non-member country and provide information
to them that would help simplify performance of the functions of all said authorities.
Article 50. Transactions Within a Group
1. The Supervisory Commission shall have the right to obtain information about
the transactions listed in paragraph 3 of this Article between an insurance undertaking and:
1) a related undertaking;
2) a participating undertaking;
3) undertakings related to the participating undertaking;
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2. The Supervisory Commission shall also have the right to obtain information
about the transactions listed in paragraph 3 of this Article between an insurance
undertaking and a natural person who participates in:
1) an insurance undertaking or a related undertaking;
2) a participating company;
3) an undertaking related to the participating undertaking;
3. The Supervisory Commission shall have the right to obtain information about
the following transactions:
1) loans;
2) guarantees, warranties and other off-balance sheet transactions;
3) transactions regarding elements included into the calculation of solvency
margin;
4) investment;
5) reinsurance;
6) transactions regarding distribution of costs;
7) other contracts essential for supplementary supervision.
4. An insurance undertaking, following the procedure set by the Supervisory
Commission, must inform the Supervisory Commission about transactions listed in this
Article. The Supervisory Commission, in exercising its right to obtain information about
the transactions referred to in subparagraph 7, paragraph 3 of this Article, must point out to
the insurance undertaking which transactions shall be essential for supplementary
supervision.
5. If it is evident from the provided information that an insurance undertaking
faces or might face a threat, the Supervisory Commission must resort to sanctions provided
for in this Law.
Article 51. Adjusted Solvency Margin of the Insurance Undertaking Referred to
in Paragraph 2 of Article 44
1. Requirements for the calculation of the adjusted solvency margin set by the
Supervisory Commission shall apply to the insurance undertaking referred to paragraph 2,
Article 44 of this Law.
2. Any related undertaking, participating undertaking or an undertaking related
to the participating undertaking shall be included when calculating the adjusted solvency
margin of an insurance undertaking.
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3. If the calculation shows that the solvency margin is not adequate to the
solvency margin of an insurance undertaking specified in paragraph 2, Article 44 of this
Law, the Supervisory Commission must resort to sanctions provided for in this Law.
Article 52. Adjusted Solvency Margin of the Insurance Undertaking
Indicated in Paragraph 3 of Article 44
1. Requirements for the calculation of the adjusted solvency margin set by the
Supervisory Commission shall apply to the insurance undertaking indicated in paragraph
3, Article 44 of this Law
2. All undertakings related to the insurance holding company as well as
reinsurance undertakings or undertakings of a non-member country shall be included when
calculating the adjusted solvency margin of an insurance undertaking.
3. If the calculation shows that the solvency of the insurance undertaking is or
may be under a threat, the Supervisory Commission must resort to sanctions provided for
by this Law.
SECTION FIVE
ACTIVITY OF INSURANCE COMPANIES IN THE EUROPEAN UNION
MEMBER STATES
Article 53. Right of an Insurance Undertaking to Provide Services in Another
European Union Member State
1. An insurance undertaking which intends to provide services in another
European Union Member State must notify the Supervisory Commission indicating at the
same time the risks which it intends to cover by insurance contracts and file documents
referred to in subparagraph 4, paragraph 2 of this Article. Information and documents must
be filed in Lithuanian and English and the state language or one of the state languages of
another European Union Member State where under the legal acts of another European
Union Member State all documents filed with the competent authority of that Member
State must be in the state language or one of the state languages of that Member State.
2. Within one month after receiving information specified in paragraph 1 of this
Article, provided that the conditions referred to in paragraph 3 of this Article are not
present, the Supervisory Commission must send, notifying of it on the same day the
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insurance undertaking, to the competent authority of the European Union Member State in
which the insurance undertaking intends to provide services the following information:
1) proof that the insurance undertaking meets the solvency margin requirements
set out in the legal acts of the Republic of Lithuania;
2) a list of insurance classes in which the insurance undertaking is authorised to
engage in its activity;
3) information on insurance risks filed by the insurance undertaking which will
be covered by contracts of insurance;
4) where the insurance undertaking intends to engage in the activity of insurance
class referred to in subparagraph 10, paragraph 3, Article 7 of this Law, except carriers’
civil liability/third party insurance, documents certifying that the insurance undertaking is
a member of the Insurer’s Bureau and the guarantee reserve of that this European Union
Member State and that it has assigned a representative for settlement of claims granting
appropriate powers to him, the name, surname and address of the representative;
3. The Supervisory Commission may, within 1 month after receiving all the
information specified under paragraph 1 of this Article, refuse to send out information
referred to in paragraph 2 of this Article, notifying the insurance undertaking thereof,
where the insurance undertaking is in non-compliance with the requirements stipulated in
the legal acts of the Republic of Lithuania and/or the financial situation of the insurance
undertaking is stable and sound according to the requirements set out in the legal acts of
the Republic of Lithuania.
4. Refusal of the Supervisory Commission referred to in paragraph 3 of this
Article may be appealed by an insurance undertaking to the court following the procedure
set out in the legal acts of the Republic of Lithuania.
5. Upon receiving information referred to in paragraph 2 of this Article from the
Supervisory Commission and having fulfilled other conditions laid down in the legal acts
of another European Union Member State, an insurance undertaking shall have the right to
start providing services in another European Union Member State.
6. An insurance undertaking must notify, not later than one month in advance,
about any changes it plans to make in the information filed pursuant to the provisions of
paragraph 1 of this Article. Provisions of paragraphs 1 - 5 of this Article shall apply to
filing of the information by an insurance undertaking, sending that information to the
competent authority of another European Union Member State, and refusal to send that
information. Refusal of the Supervisory Commission to send information shall deprive the
insurance undertaking from making the changes planned.
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Article 54. Establishment of a Branch of an Insurance Undertaking in
Another European Union Member State
1. An insurance undertaking which intends to establish a branch in another
European Union Member State must file with the Supervisory Commission the following
information and documents:
1) the name of the European Union Member State in which it intends to establish
a branch;
2) a scheme of operations of a form and content determined by the Supervisory
Commission;
3) the address of the branch office to which and at which correspondence may be
sent and received and a confirmation that any correspondence addressed to the head of the
branch of the insurance undertaking may be sent to the indicated address;
4) documents attesting that the insurance undertaking has appointed a person of
good repute, having adequate professional qualifications and experience in the field of
insurance to act as the branch’s head duly empowered to establish rights and obligations
for the insurance undertaking which has founded the branch in another European Union
Member State, to represent the undertaking in the court at other government and
administration institutions of that Member State when dealing with respect to third parties;
5) where an insurance undertaking intends to carry out, through a branch
founded in another European Union Member State, insurance falling within the insurance
class referred to in subparagraph 10, paragraph 3, Article 7 of this Law (except carriers’
civil liability/third party insurance), documents attesting that the insurance undertaking is a
member of the Insurers’ Bureau and the guarantee reserve of that European Union
Member State.
2. Documents specified in paragraph 1 of this Article must be submitted in
Lithuanian and English and the state language of another European Union Member State,
or in one of the state languages where legal acts of another Member State stipulate a
requirement that all documents filed with the competent authority of that Member State
must be in its state language or one of its state languages.
3. Within three months after receiving documents and information specified in
paragraph 1 of this Article and in the absence of the conditions referred to in paragraph 4
of this Article, the Supervisory Commission must send, notifying on the same day the
insurance undertaking thereof, to the competent authority of another European Union
Member State in which the insurance undertaking intends to establish a branch the
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documents and information received together with a proof that the insurance undertaking
meets the solvency margin requirements set out in the legal acts of the Republic of
Lithuania.
4. The Supervisory Commission may, within three months after receiving all the
documents and information specified in paragraph 1 of this Article, refuse, notifying the
insurance undertaking thereof, send the documents and information referred to in
paragraph 3 of this Article only where:
1) the structure of the supervisory and management bodies of the insurance
undertaking does not meet the requirements stipulated in the legal acts of the Republic of
Lithuania and/or is not adequate for an efficient management of the undertaking;
2) the insurance undertaking is in non-compliance with the requirements
stipulated in the legal acts of the Republic of Lithuania and/or the financial situation of the
insurance undertaking is not stable and sound according to the requirements stipulated in
the legal acts of the Republic of Lithuania;
3) members of the supervisory board and the board, the head of the
administration, the chief financier, chief actuary of the insurance undertaking or the
appointed head of the branch to established do not meet the criteria set out in the legal acts
of the Republic of Lithuania;
4) it may be assumed from the scheme of operations that the interests of the
policyholders, insured persons, beneficiaries, and any injured party are not properly
protected or there is good reason to believe that the commitments of the insurance
undertaking under the contracts of insurance will not be fulfilled on a continuous basis.
5. A refusal of the Supervisory Commission referred to in paragraph 4 of this
Article may be appealed to the court by the insurance undertaking in accordance with the
procedure specified in the laws of the Republic of Lithuania.
6. An insurance undertaking may establish a branch and launch its activities
upon receiving from the competent authority of another European Union Member State a
notification about the right to establish the branch and start its activities as well as the
conditions of the activities; where such a notification is not received within two months
after receiving by the insurance undertaking from the Supervisory Commission a
notification in writing referred to in paragraph 3 of this Article, the insurance undertaking
may establish its branch upon the expiry of a two-month time period.
7. The Supervisory Commission and the competent authority of another
European Union Member State where a branch has been established must be notified at
least one month in advance of any planned changes in the documents referred to in
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subparagraphs 2 – 4, paragraph 1 of this Article. Filing of the information by the insurance
undertaking, sending of the information submitted to the competent authority of another
Member State, and refusal to send that information shall be subject to the provisions of
paragraphs 1- 5 of this Article, however, the three month time period provided fort in
paragraphs 3 and 4 of this Article shall be replaced by a time period of one month. Refusal
of the Supervisory Commission to send information shall deprive the insurance
undertaking of the right to make the changes planned.
Article 55. Branches of Insurance Undertakings Engaged in Non-life
Insurance in the Confederation of Switzerland
Branches of insurance undertakings engaged in non-life insurance in the
Confederation of Switzerland shall be established and shall operate under the rules
applicable to the establishment and activity of branches of insurance undertakings in other
European Union Member States to the extent the Agreement between the European
Economic Community and the Confederation of Switzerland on Direct Insurance Other
than Life Assurance does not provide otherwise.
CHAPTER III
ACTIVITIES OF INSURANCE UNDERTAKINGS OF OTHER EUROPEAN
UNION MEMBER STATES IN THE REPUBLIC OF LITHUANIA
Article 56. Right to Carry out Insurance Activity in the Republic of Lithuania
Insurance undertakings of other European Union Member States shall have the
right to establish subsidiaries, provide services or establish a branch in the Republic of
Lithuania.
Article 57. Right of Insurance Undertakings of Other European Union
Member States to Provide Services in the Republic of Lithuania
1. An insurance undertaking of another European Union Member State shall have
the right to start providing services in the Republic of Lithuania only upon the receipt by
the Supervisory Commission from the competent authority of the Member State of
documents which must be submitted by this authority to the Supervisory Commission in
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accordance with the legal acts of that European Union Member State upon meeting other
conditions stipulated in this Article.
2. Where an insurance undertaking of another European Union Member State
intends to provide insurance falling within the group referred to in subparagraph 10,
paragraph 3, Article 7 of this Law, with the exception of carriers’ civil liability/third party
insurance, it must additionally provide to the Supervisory Commission:
1) documents evidencing that the insurance undertaking of that Member State is
a member of the Insurers’ Bureau of the Republic of Lithuania and participates in the
guarantee fund of the Bureau;
2) documents evidencing that the insurance undertaking of that Member State
has assigned a representative for settlement of claims in the Republic of Lithuania who is
empowered to represent the undertaking in the court and other state and administration
institutions of the Republic of Lithuania as well as in dealings with natural and legal
persons, and indicate the name, surname and the address of the representative;
3) documents evidencing that the assigned representative has been granted the
right to administer insured events, pay insurance benefits, verify on behalf of the insurance
undertaking of another European Union Member State the fact of conclusion and coming
into effect compulsory insurance contracts;
4) the address of the representative in the Republic of Lithuania.
3. The representative of an insurance undertaking of another Member State
indicated in paragraph 2 of this Article shall have no right to conclude on behalf of the
represented insurance undertaking insurance contracts in the Republic of Lithuania. A
branch of an insurance undertaking other than the represented undertaking of another
European Union Member State established in the Republic of Lithuania may be assigned
as a representative.
4. Assignment of a representative provided for in this Article and the presence of
a representative in the Republic of Lithuania shall not be considered a branch or agency
and office of an insurance undertaking of another European Union Member State in the
Republic of Lithuania within the meaning of paragraph 54 of Article 2 and Article 6 of this
Law.
5. In any other case not provided for in this Article the possibility for insurance
undertakings of other European Union Member States to provide services in the Republic
of Lithuania shall not give the right to an insurance undertaking of another European
Union Member State to assign a person subordinate to instructions and control of the
represented undertaking who will in the Republic of Lithuania permanently or for a long
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period of time, who has been empowered to establish the rights and obligations for an
insurance undertaking of another European Union Member State with regard to third
parties.
Article 58. Branches of Insurance Undertakings of Other European Union
Member States
1. Upon being informed by the competent authority of another European Union
Member State about the intention of an insurance undertaking of the Member State to
establish a branch in the Republic of Lithuania and upon receiving from that authority
information and documents of the insurance undertaking of another Member State which
the authority must provide to the Supervisory Commission in accordance with the legal
acts of that Member State, the Supervisory Commission must inform, within two months
after the receipt of this information, the competent authority of that European Union
Member State about conditions applicable to the activities of branches of insurance
undertakings of other Member States in the Republic of Lithuania precluding breaches of
public order. Where the Supervisory Commission fails to provide such information within
the set time period an insurance undertaking of another European Union Member State
shall have the right to establish a branch and commence its activities in the Republic of
Lithuania.
2. An insurance undertaking of another Member State which, when planning to
establish a branch in the Republic of Lithuania submitted to the competent authority of the
European Union Member State information and documents in accordance with the
requirements of the legal acts of the Member State must, not later than one month in
advance, notify the Supervisory Commission about any planned changes in the
information and documents filed.
3. An insurance undertaking of another European Union Member State shall have
the right to engage in the activity falling within the group referred to in subparagraph 10,
paragraph 3, Article 7 of this Law, with the exception of carriers’ liability insurance,
through a branch established in the Republic of Lithuania, only upon becoming a member
of the Insurers’ Bureau of the Republic of Lithuania and taking part in the guarantee fund
of the Bureau.
4. As far as Lloyd’s insurers association is concerned, in any disputes in the
Republic of Lithuania arising from or related to insurance contracts concluded by a branch
of this association established in the Republic of Lithuania, the policyholders, insured
persons, beneficiaries and any injured party shall have the same rights as in disputes
57
arising from insurance contracts with any other insurance undertakings and branches of
insurance undertakings of other European Union Member States or non-member countries.
The head of a branch of Lloyd’s insurers association in the Republic of Lithuania must
have powers sufficient to enable him to represent that association in disputes settled in
court and other disputes stemming from an insurance contract or related to it and by his
actions cause the establishment of rights and obligations for the insurers of that
association.
Article 59. Branches of Insurance Undertakings of the Confederation of
Switzerland Engaged in Non-life Insurance Activity
Unless otherwise provided by the Supervisory Commission, the provisions applied
to setting up and pursuit of activity for branches of insurance undertakings of other
European Union Member State shall also apply to setting up and pursuit of activity in the
Republic of Lithuania for branches of insurance undertakings of the Confederation of
Switzerland engaged in non-life insurance activity.
Article 60. Language
All documents filed with the Supervisory Commission shall be in the Lithuanian
language, and where documents are filed by a competent authority or insurance
undertaking of another European Union Member State - also/or in the English language..
CHAPTER IV
ACTIVITY OF INSURANCE UNDERTAKINGS OF NON-MEMBER
COUNTRIES IN THE REPUBLIC OF LITHUANIA
Article 61. Right to Engage in Insurance Activity
1. Foreign insurance undertakings shall have the right to engage in insurance
activity only through a subsidiary, a branch or an agency established in the Republic of
Lithuania.
2. Activity and supervision of branches of insurance undertakings of non-member
countries shall be subject to the same requirements as insurance undertakings of the
Republic of Lithuania, taking account of exceptions and characteristics of the legal status
and activity of a branch provided for in this Chapter and resolutions of the Supervisory
Commission.
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3. The Supervisory Commission, having regard to the exceptions and
characteristics of the legal status and activity of branches of insurance undertakings of
non-member countries, shall approve mandatory instructions or recommendations on the
application of the provisions of this Law to branches of insurance undertakings of nonmember countries.
4. Activity and supervision of agencies of insurance undertakings of non-member
countries shall be subject to the same provisions that are applied to branches of insurance
undertakings of non-member countries.
Article 62. Authorisation for Insurance Activities of a Branch
1. A branch of an insurance undertaking of a non-member country shall have the
right to carry out insurance activity in the Republic of Lithuania subject to an authorisation
obtained from the Supervisory Commission for the activity of the branch and subsequent
registration of the branch in the Register of Legal Persons. A branch of an insurance
undertaking of a non-member country must, within five working days, inform the
Supervisory Commission about the registration.
2. An authorisation for insurance activity of a branch shall be issued for all the
insurance activities of the whole insurance class or a number of insurance classes falling
within life or non-life insurance categories, except the cases when the applicant wishes to
engage in the insurance of only a part of risks covered by the insurance class/classes.
3. An authorisation for the activity of a branch shall be granted for an unlimited
period of time.
4. An authorisation for the insurance activity of a branch shall be issued only to a
concrete insurance undertaking of a non-member country and may not be transferred to
another person.
5. An authorisation shall be issued for insurance activity of only one branch.
Structural units of the branch shall be established and operate in the Republic of Lithuania
in the manner stipulated by the Supervisory Commission.
6. The procedure of granting authorisations and the form of the authorisation for
the insurance activity of a branch of an insurance undertaking of a non-member country
shall be determined by the Supervisory Commission.
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Article 63. Application for Authorisation for Insurance Activity of a Branch
1. An insurance undertaking of a non-member country must file with the
Supervisory Commission an application for an authorisation for the insurance activity of a
branch in the Republic of Lithuania.
2. An application for authorisation for the insurance activity of a branch in the
Republic of Lithuania an insurance undertaking of a
non-member country must be
accompanied by the following documents:
1) a proof in writing from a competent authority of a non-member country that the
insurance undertaking of that country has the right to engage in the insurance activity in
the non-member country in which it is registered;
2) an authorisation issued by a competent authority of the non-member country to
establish a branch in the Republic of Lithuania or a proof that the competent authority of
the non-member state does not object to the establishment of a branch in the Republic of
Lithuania;
3) confirmation of the competent authority of the non-member state that the
insurance undertaking of that country has met for the last three years the requirements of
solvency margin, establishment of technical provisions and their cover by assets as well as
other requirements stipulated in the legal acts of the non-member state for the activities of
insurance undertakings, also indicating the insurance classes in the activities of which the
insurance undertaking of the non-member
state has the right to engage. Where the
insurance undertaking of a non-member country has been operating for less than three
years, the competent authority of that country must provide proof about the entire period
of the activities of the insurance undertaking;
4) a decision of the management of the insurance undertaking of a non-member
country to establish a branch in the Republic of Lithuania, to approve the articles of
association of the branch, and to appoint the head of the branch, as well as a written
commitment of the management to keep financial statements and other documents related
to the activities of the established branch at the office of the branch;
5) documents certifying that the insurance undertaking of a non-member country
has appointed a person of good repute, adequate professional qualifications and experience
to act as the head of the who has been empowered to establish rights and obligations for
the insurance undertaking, to represent the undertaking in the court of the Republic of
Lithuania and other state and administration institutions;
60
6) documents certifying that the insurance undertaking of a non-member country
has appointed persons of good repute, adequate professional qualifications and experience
to act as the chief financier and the chief actuary of the branch;
7) articles of association of the branch;
8) agreements specified in paragraph 1, Article 27 of this Law if they have been
concluded;
9) information in a form set by the Supervisory Commission about shareholders,
other controlling persons, participating undertakings and the members of the supervisory
and management bodies of the insurance undertaking of a non-member country;
10) a scheme of operations in a form set by the Supervisory Commission together
with financial statements of the insurance undertaking of a non-member country for the
last three years audited by an independent auditor. Where the insurance undertaking of a
non-member country has been operating for less than three years, it shall be subject to a
requirement to provide financial statements for each completed financial year audited by
an independent auditor;
11) documents attesting that the insurance undertaking of a non-member country
has concluded a bank deposit contract as specified in paragraph 1, Article 72 of this Law,
and documents attesting that the insurance undertaking of anon-member country has
transferred to a bank account in the Republic of Lithuania the amount of money which
together with the deposit funds of the insurance undertaking would constitute the
guarantee fund specified in paragraph 2, Article 71 of this Law. It shall be also obligatory
to provide information about the origin all these funds;
12) for the activity of the insurance class provided for in subparagraph 10,
paragraph 3, Article 7 of this Law, with the exception of carriers’ civil liability/third party
insurance, documents evidencing that the insurance undertaking has assigned in each
European Union Member State a representative empowered to deal with issues of
insurance benefits, also to indicate the name and address of the representative.
Article 64. Granting of Authorisation for the Insurance Activity of a Branch
1. The Supervisory Commission shall, within six months after filing of an
application for an authorisation for the insurance activity of a branch, adopt a decision on
granting of an authorisation and notify the applicant in writing thereof.
2. The Supervisory Commission shall refuse to issue authorisation where:
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1) documents stipulated in this Law or requested following the procedure set out in
this Law have not been filed or where documents filed do not meet the requirements of the
laws of the Republic of Lithuania;
2) an insurance undertaking of a non-member country in a non-member country
where it has been registered does not own assets equivalent in Euro to at least 1/2 of the
amount referred to in paragraph 3, Article 39 of this Law, taking account of the insurance
class in which it intends to be engaged;
3) members of the supervisory board, the board of the insurance undertaking of a
non-member country (or members of the bodies equivalent to them), the head of the
administration, and the head of the branch about to be established, its chief financier and
the chief actuary area not of good repute, adequate professional qualifications and
experience;
4) shareholders (member share holders etc.) and controlling persons of an
insurance undertaking of a non-member country are not of good repute, their financial
situation and/or the financial situation of the insurance undertaking of a non-member
country is not stable and sound;
5) it may be assumed from the submitted scheme of operations that the interests of
the policyholders, insured persons, beneficiaries and any injured party will not be properly
protected or there is a good reason to believe that the commitments of the branch of the
foreign insurance undertaking arising from contracts of insurance will not be met on a
continuous basis;
6) the origin of the deposit of the insurance undertaking of a non-member country
and the guarantee fund of its branch is not legal;
7) the head of the branch of the insurance undertaking of a non-member country
also holds a position which may give rise to a conflict of interests;
8) the Supervisory Commission has not entered into a co-operation agreement with
the competent authority of the non-member state on the exchange of information or the
competent authority of the non-member state has not assumed, in accordance with form of
obligation determined by the Supervisory Commission, a unilateral obligation to provide
information to the Supervisory Commission;
9) legal acts of the non-member state do not provide conditions for an ongoing and
efficient supervision of the insurance undertaking of that country, protection of the
interests of the policyholders, insured persons, beneficiary, and any injured party, or the
competent authority of that country does not perform efficient supervision of that
62
insurance undertaking and does not protect the interests of the policyholders, insured
persons, beneficiaries, and any the injured party.
3. When issuing an authorisation for the activities of a branch of a non-membercountry insurance undertaking the Supervisory Commission shall have the right to set
conditions which must be fulfilled by the branch of the said undertaking before starting its
activity and/or conditions or restrictions on insurance activity of certain risks which must
be complied with by the branch of a non-member-country insurance undertaking in its
activities.
4. A branch of a non-member-country insurance undertaking in the Republic of
Lithuania may engage only in the insurance activity of those insurance classes which it is
authorised to carry out by its license (authorisation etc.) for insurance activity and/or legal
acts of the non-member state. Where a non-member-country insurance undertaking has
the right to engage in life assurance and non-life insurance categories at the same time, a
branch of a non-member-country insurance undertaking established in the Republic of
Lithuania shall have the right to engage only in the activity of insurance classes falling
within non-life insurance category..
5. When there is a suspicion that the deposit of a non-member country insurance
undertaking or the guarantee fund of its branch may have been paid from financial
resources of illegal origin, the Supervisory Commission must apply the State Security
Department seeking its conclusion about the origin of the said funds. In such a case the
time period specified in paragraph 1 of this Article shall be suspended and shall be
resumed upon receipt of the conclusion from the State Security Department.
Article 65. Information about Amendments
A branch of a non-member-country insurance undertaking established in the
Republic of Lithuania must notify the Supervisory Commission, following the procedure
prescribed by it, about any amendments of the information given in the documents
submitted to the Supervisory Commission for obtaining an authorisation for insurance
activities of the branch.
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Article 66. Suspension and Withdrawal of Authorisation for the Insurance
Activity of a Branch
1. When there are grounds provided in paragraph 1, Article 198 of this Law, the
Supervisory Commission shall have the right to suspend the authorisation granted to a
branch to engage in insurance activity.
2. The Supervisory Commission shall have the right to withdraw the authorisation
for the insurance activity of a branch where:
1) a non-member-country insurance undertaking or its branch in the Republic of
Lithuania no longer meets the requirements which were set for the issuance of the
authorisation for the insurance activity of the branch;
2) the branch of a non-member-country insurance undertaking is in gross breach of
legal acts;
3) at the request of a non-member-country insurance undertaking;
4) the branch of a non-member-country insurance undertaking has not commenced
insurance activities within 12 months after the issuance of the authorisation;
5) the branch of a non-member-country insurance undertaking has not been
engaged in insurance or related activity for more than six months;
6) the branch of a non-member-country insurance undertaking has failed to
implement the plans for recovery of the financial situation set out in Article 40 of this
Law;
7) the foreign insurance undertaking is in liquidation or bankruptcy proceedings have
been instituted against it;
8) the time period for the operation of the branch se in the articles of association of the
branch has expired;
9) the competent authority of a non-member country prohibits to the non-membercountry insurance undertaking to carry out its activity in the Republic of Lithuania;
10) in the case specified in paragraph 9, Article 74 of this Law;
11) the court hands down a decision to terminate the activity of the branch for a
violation of the laws of the Republic of Lithuania.
3. The Supervisory Commission shall notify the competent authority of the nonmember state in question about its decision to withdraw the authorisation for insurance
activity of the branch.
4. The decision on the withdrawal of the authorisation for insurance activity of the
branch must be motivated in great detail. The Supervisory Commission must notify the
non-member-country insurance undertaking about the decision and its motives.
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Article 67. Head and Other Employees of the Branch
1. Before the appointment of the head of a branch, the non-member-country
insurance undertaking must provide to the Supervisory Commission information of a form
determined by the Commission and obtain from it approval of the person who is seeking
the position. The Supervisory Commission shall make a decision concerning the candidate
within 30 working days.
2. An insurance undertaking of a non-member country must:
1) determine the strategic goals of the branch along with measures for achieving
these goals, a procedure for monitoring of these measures and evaluation of the results;
2) establish and monitor independent risk management strategy of the branch
related to the activity carried out by it.
3. Apart from other functions provided by laws, the head of a branch of a nonmember-country insurance shall perform the following functions:
1) determine the procedure for concluding insurance contracts which shall be
also applicable to undertakings of insurance agents, attaching a particularly high
importance to disclosure of information which is essential when concluding insurance
contracts to the policy holders, respect for and security of the interests of every
policyholder;
2) prescribe the procedure for notification about the insured events, the events
which may be recognised as insured events and the procedure for keeping records of the
results of analysis of these notifications, and the rules of investigation of insured events
and events which may be recognised as insured events;
3) prescribe the procedure for hearing of claims of the policyholders, insured
persons, beneficiaries and any injured party and replying to claimants; this procedure must
be announced publicly on the website of the branch of a non-member-country insurance
undertaking and made available to any interested person on request after the fee for the
service has been paid;
4) define the procedure for assessment of professional qualifications, good
repute and experience of persons seeking senior positions in the administration of the
branch;
5) implement instructions and recommendations of the Supervisory Commission
relating to enhancement of internal control of the and transparent, credible and prudent
management.
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4. The head of the branch shall have no right to appoint the chief financier, chief
actuary and the head of the internal audit service/internal auditor. Those persons shall be
appointed by another body of a non-member-country insurance undertaking; their
appointment and activity shall be subject to the requirements laid down in this Law,
however, they shall be accountable to the body of a non-member-country insurance
undertaking which has appointed them.
5. The head of a branch of an non-member-country insurance undertaking may
not perform obligations of another member of the management, the chief financier or chief
actuary of the non-member-country insurance undertaking in question, be a member of the
supervisory board or the board of another insurance undertaking or be employed in the
administration of another insurance undertaking.
Article 68. Scheme of Operations
1. The activities of a branch of a non-member-country insurance undertaking
must be based on the scheme of operations. The branch must notify the Supervisory
Commission about the amendments it is planing to make in the scheme and get the
Commission’s agreement to the amendments in accordance with the procedure prescribed
by the Commission.
2. The form of the scheme of operations and the procedure of filing it shall be
established by the Supervisory Commission.
Article 69. Technical Provisions of a Branch
1. A branch of a non-member-country insurance undertaking must meet the
requirements set for establishing and covering by assets of technical provisions as
stipulated in this Law and by the Supervisory Commission.
2. Assets which a branch of a non-member-country insurance undertaking uses to
cover its technical provisions may be situated only in the Republic of Lithuania.
Article 70. Characteristics of Reinsurance Activity Carried out by a Branch
A branch of a non-member-country insurance undertaking established in the
Republic of Lithuania shall have the right to engage in reinsurance of the risks of the
insurance class which it carries out in accordance with the procedure stipulated in the laws
of the Republic of Lithuania, provided that the non-member-country insurance undertaking
has the right to perform reinsurance of the risks of an analogous insurance class in that
country.
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Article 71. Solvency Margin of a Branch
1. Solvency margin of a branch of a non-member-country insurance undertaking
shall be calculated according to the procedure established by this Law and the Supervisory
Commission.
2. A portion of the available solvency margin which equals the greater of the two
amounts – the minimum guarantee fund or 1/3 of the required solvency margin – shall
constitute the guarantee fund of a branch of a non-member-country insurance undertaking.
The minimum guarantee fund of the branch shall be equal to 1/2 of the amount specified in
paragraph 3, Article 39 of this Law, taking account of the activities of insurance classes
carried out by the branch. The funds referred to in paragraph 1, Article 72 of this Law shall
be included when calculating the minimum guarantee fund.
3. The guarantee fund must be kept or invested only in the Republic of Lithuania,
while other funds of the solvency margin - only in the European Union Member States.
Article 72. Deposit of a Non-Member-Country Insurance Undertaking
1. A non-member-country insurance undertaking which has established a branch in
the Republic of Lithuania must, throughout the entire period of the activity of the branch,
have in a bank account opened in the Republic of Lithuania under a demand deposit
contract a sum of money not smaller than 1/4 of the amount referred to in paragraph 3,
Article 39 of this Law, having regard to the activity of the insurance class that the
established branch intends to carry out.
2. Funds referred to in paragraph 1 of this Article may be used only in accordance
with the procedure determined by the Supervisory Commission in order to perform the
obligations of the branch arising from insurance contracts.
3. The bank deposit contract specified in paragraph 1 of this Article must have a
clause providing that a branch of a non-member-country insurance undertaking shall have
the right to dispose the deposit funds only upon submitting to the bank a consent in writing
from the Supervisory Commission.
Article 73. Transfer of Rights and Obligations Arising from Insurance
Contracts of a Branch
1. A branch of a non-member-country insurance undertaking shall have the right to
transfer rights and obligations arising from all insurance contracts or part of them to an
insurance undertaking or a branch of an insurance undertaking of another non-member
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country established in the Republic of Lithuania where the information in possession of
the Supervisory Commission or the information held by the competent authority of the
chosen European Union Member State, notified according to the procedure set out in
Article 74 of this Law, allows to assume that after the transfer of the rights and obligations
the solvency margin of the entity taking over the rights and obligations shall remain at the
level prescribed by legal acts.
2. A branch of a non-member-country insurance undertaking shall also have the
right to transfer rights and obligations arising from all insurance contracts or part of them
to an insurance undertaking of another European Union Member State, provided that the
competent authority of that Member State verifies that after the transfer of the rights and
obligations, the solvency margin of the entity taking over the rights and obligations shall
remain at the level prescribed by legal acts,
3. A branch of a non-member-country insurance undertaking shall also have the
right to transfer rights and obligations arising from all insurance contracts or part of them
to a branch of a non-member-country insurance undertaking established in another
European Union Member State, provided that the chosen competent authority of the
European Union Member State, notified in accordance with the procedure determined by
the Member State or Article 74 of this Law, verifies that the solvency margin of the entity
taking over the rights and obligations shall, after the transfer of the rights and obligations,
remain at the level prescribed by legal acts, that legal acts of the Member State in question
permit such transfers of rights and obligations, and that the Member State in question does
not object to the transfer of rights and obligations.
4. In cases specified in paragraphs 1 - 3 of this Article the Supervisory Commission
shall issue an authorisation for the to transfer of rights and obligations arising from
insurance contracts only where the conditions referred to in subparagraphs 1 – 4,
paragraph 3, Article 42 of this Law are met and a permit has been obtained from the
competent authority of another European Union Member State in which the insurance risk
is situated or another European Union Member State of the commitment under a life
assurance contract.
5. Where a consent or approval stipulated in this Article is not received within
three months after the submission of information to the competent authority of another
Member State, it shall be deemed that the competent authority of the Member State in
question does not object to the transfer of rights and obligations.
6. Other requirements set out in Articles 41 and 42 of this Law shall also apply to
the transfer of rights and obligations unless this Article provides otherwise,.
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Article 74. Privileges when Establishing and after the Establishment of
Branches in Several European Union Member States
1. A non-member-country insurance undertaking which hopes to be granted or
which has already been granted authorisations for insurance activity in more than one
European Union Member State shall have the right to apply to the Supervisory
Commission for the following privileges:
1) solvency margin may be calculated having regards to the insurance activities of
branches of the insurance undertaking carried out in the Republic of Lithuania and other
European Union Member States;
2) a deposit of the insurance undertaking may be kept in only one European Union
Member State, in which a branch of the insurance undertaking is engaged in insurance
business;
3) the guarantee fund may be kept in any European Union Member State where a
branch of the insurance undertaking is engaged in insurance business.
2. The application shall be accompanied by documents certifying that an analogous
application has been or is being filed with the competent authorities of all other European
Union Member States in which the non-member-country insurance undertaking intends to
carry out or is already carrying out insurance activity through the branches it has
established. The application must indicate the chosen competent authority of a Member
State which in future will supervise solvency determined by the activities performed in the
European Union Member States and the reasons for choosing this particular competent
authority.
3. Privileges may be applied only where all the competent authorities of the
Member States to which an application for privileges must be submitted agree to apply the
privileges.
4. Privileges shall come into effect when the chosen competent authority informs
the Supervisory Commission and the competent authorities of the other Member States
that it will supervise solvency determined by the insurance activity performed by the
branches in the Republic of Lithuania and the European Union Member States or, where
the Supervisory Commission has been chosen as the competent authority, when it informs
the appropriate competent authorities of the other Member States.
5. The Supervisory Commission must provide information necessary for the
supervision of solvency to the competent authority of another European Union Member
State chosen by a non-member-country insurance undertaking.
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6. The Supervisory Commission, having regard to the privileges revoked by other
competent authorities, shall revoke application of privileges where at least one competent
authority requests that.
7. Financial statements, other financial and statistical reports of non-membercountry insurance undertakings shall be submitted to the competent authority of the chosen
European Union Member State following the procedure set out in the legal acts of that
Member State. A deposit of a non-member-country insurance undertaking must be held
only in that European Union Member State.
8. After withdrawal of an authorisation for insurance activity of a privileged branch
of a non-member-country insurance undertaking, the Supervisory Commission must notify
the competent authorities of the European Union Member States in which the nonmember-country insurance undertaking has branches.
9. Upon receiving a notification that the competent authority of another Member
State has adopted a decision to withdraw the authorisation of a privileged branch of a nonmember-country insurance undertaking for insurance activity, the Supervisory
Commission shall have the right to resort to sanctions also to the branch of non-membercountry insurance undertaking established in the Republic of Lithuania. Where the
competent authority of another European Union Member State has adopted a decision to
withdraw the authorisation for insurance activity due to insufficiency of the available
solvency margin calculated by including all the branches of a non-member-country
insurance undertaking in the European Union Member States, the Supervisory
Commission shall withdraw the authorisation for insurance activity of the branch.
10. The chosen competent authority of another European Union Member State
referred to in paragraph 2 of this Article, in carrying out supervision of solvency of the
branch of a non-member-country insurance undertaking, shall have the same rights to have
access to information as the Supervisory Authority.
CHAPTER V
INSURANCE CONTRACT AND CO-INSURANCE
SECTION ONE
GENERAL PROVISIONS
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Article 75. Application of Provisions of Chapter V
1. Pre-contractual relations between the parties, the terms and conditions of the
insurance contract and the relations arising from and related to the insurance contract shall
be subject to provisions of the Civil Code and this Chapter.
2. Provisions of this Chapter shall apply to reinsurance only where this is expressly
provided in this Chapter.
3. The provisions of Section One of this Chapter shall apply to all insurance
contracts, unless the provisions of other sections of this Law or this section do not provide
otherwise.
4. The provisions of sections 1, 2 and 3 of this Chapter on contractual relations of the
insurance contracts of large risks shall be applicable to the extent the parties to the contract
have not agreed otherwise.
Article 76. Classification of Insurance Contracts
1. According to the categories of insurance, insurance contracts may be
classified into life and non-life insurance contracts. Non-life insurance contracts shall
comprise property, civil liability and health insurance contracts.
2. According to the nature of insurance benefits, insurance contracts shall be
classified into indemnity and sum insurance contracts.
3. Sum insurance contracts shall be life assurance contracts, also health
insurance contracts under which the insurer commits himself to pay, when the insurance
event occurs, a benefit equal to the sum insured or its part.
4. Indemnity insurance contracts shall be property, civil liability, also health
insurance contracts under which the insurer commits himself to pay, when the insured
event occurs, a benefit in the amount of the loss incurred.
Article 77. Insurance Policy Conditions
1. Insurance policy conditions shall specify the following:
1) cases where insurance contracts are concluded upon a written application of
the policyholder;
2) insured events;
3) non-insured events where the insurer must not pay insurance benefits;
4) the subject covered;
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5) procedure for calculation of sums insured where they are established,
calculation of rates of premiums, procedure for payment of premiums as well as
consequences for breaches of the procedure;
6) conditions for double insurance, underinsurance and supplementary insurance
where there is an indemnity insurance contract;
7) rights and obligations of the insurer, policyholder, beneficiary and the injured party;
8) loss evaluation procedures;
9) procedure for calculation of benefits and time periods for their payment;
10) revision and termination of the terms and conditions of an insurance
contract, including the procedure for termination of an insurance contract where the
policyholder objects to the insurer’s intention to transfer rights and obligations under the
insurance contract to another insurer/s;
11) the procedure for settlement between the parties to the contract after the
termination of the contract, including settlement with the policyholder who, objecting to
the insurer’s intention to transfer rights and obligations under the insurance contract to
another insurer(s) has terminated the insurance contract;
12) the procedure for transfer of the insurer’s rights and obligations to another insurer;
13) the procedure for resolution of disputes between the insurer and the
policyholder;
14) the procedure for providing information to the other party.
2. Insurance policy conditions must be announced on the website of the
insurance undertaking.
3. At the request of the Supervisory Commission, the insurer must amend
insurance policy conditions which are in contradiction to the provisions of legal acts or
which violate consumer rights and interests. At the request of the Supervisory
Commission, in future the insurer must conclude insurance contracts according to the
amended insurance policy conditions.
4. Before commencing compulsory insurance, at the request of the Supervisory
Commission, the insurer must submit compulsory insurance policy conditions to the
Supervisory Commission, except for the cases where compulsory insurance conditions are
provided in legal acts. The Supervisory Commission shall verify whether the submitted
compulsory insurance conditions are in compliance with legislative requirements, are not
in breach of the interests of policyholders, insured persons, beneficiaries and the injured
party, including consumer interests.
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Article 78. Information for the Policyholder
1. Before concluding a life assurance contract, the insurer or a person authorised by him
must provide to the policyholder:
1) information specified in paragraph 8, Article 6.993 of the Civil Code;
2) information about the law applicable to the insurance contract; where the contractual
parties are free to choose the applicable law – the law proposed by the insurer.
2. During the term of the validity of the contract, the insurer shall inform, without
delay, the non-life insurance contract policyholder - a natural person about any amendment
of the information specified in paragraph 1 of this Article.
3. Upon conclusion of an insurance contract, an insurance policy must be issued to the
policyholder, and where an individual insurance contract has been concluded - a copy of
the individual insurance contract.
4. Where upon conclusion of an insurance contract, the policyholder asks the insurer to
be provided the insurance policy conditions or the individual insurance contract, the
policy, the policyholder’s written application for the conclusion of an insurance contract
and copies of any other documents in attestation of the conclusion of the insurance
contract, the insurer must issue to the policyholder copies of the documents requested after
the latter pays the agreed fee which is not in excess of the costs of issuing of copies of
documents, where such a fee is provided for in the insurance contract.
5. Where this Chapter provides for an individual discussion of a condition of the
insurance contract, the insurer must inform the policyholder about the condition of the
contract proposed as well as its effect. This condition of individual agreement shall be
valid only where the policyholder confirms by his signature that he has become familiar
with it and in writing expresses his consent to include it in the contract.
Article 79. Insurable Interest
A lawful interest of the policyholder and the insured person which may be
expressed in money shall be an obligatory precondition for an indemnity insurance
contract .
Article 80. Failure to Pay the Premium
1. If the policyholder fails to pay the premium or its part by the time provided for in the
insurance contract, except in the cases where coming into effect of the contract is
conditional on the payment of the premium or its part, the insurer must inform the
policyholder of the fact in writing, and state that unless the premium or its part is paid
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within 15 days and on life assurance - within 30 days after receipt of the information,
insurance cover will be suspended and will be renewed only after the policyholder pays the
premium or its part. If the contract does not provide any other ways of communication, it
shall be presumed that the insurer has received the notice sent by post after a reasonable
period of time after it has been sent. The insurance contract may provide time periods
longer than those specified in this paragraph.
2. If an insured event occurred during the suspension of the insurance cover, the insurer
must not pay the insurance benefit. If, in civil liability insurance the insurance contract
provides that an insured event will be considered filing of the claim for compensation of
the loss, any acts that resulted in the loss during the suspension of the contract gives the
insurer the right to refuse to pay the benefit even if the claim for compensation for the loss
has been submitted after the moment of suspension of insurance cover.
3. If the suspension of insurance cover lasts for more than three months and in
life assurance - for more than six months, the insurer shall have the right to cancel the
insurance contract unilaterally.
Article 81. Right to the Insurance Benefit
The right to request payment of the insurance benefit shall belong to the
policyholder and, in cases provided for in law and/or in the insurance contract, also to the
beneficiary or the injured party. If the beneficiary or the injured party requests payment of
the insurance benefit, the insurer shall have the right to use all the pleadings he has against
the policyholder.
Article 82. Payment of the Benefit
1. The policyholder, beneficiary and/or any injured party must provide to the
insurer submit all the documents and information available to him about the circumstances
and consequences of the insured event which are necessary in order to establish the
amount of the benefit. At the request of the insure, the above-mentioned persons must also
provide documents about the circumstances and consequences of the insured event
necessary for establishing the amount of the insured event which they are entitled to obtain
following the procedure established by laws and other legal acts. The insurance contract
must indicate what documents have been provided to the insurer.
2. The insurance benefit must be paid within 30 days from the day of receipt of
all the information important for establishing the fact, circumstances and consequences of
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the insured event as well as the amount of the insurance benefit. If the insurance contract
provides for a periodic payment of insurance benefits, the provision in first sentence of this
Article shall apply to the first periodic insurance benefit.
3. The insurer shall not have the right to:
1) pay the insurance benefit or refuse to pay it unless he is convinced of the
existence of the insured event;
4. refuse to pay the benefit without prior verification of all the information
available must provide to the insurer all the information available to them about the
circumstances and consequences of the insured event and of the event that may be
recognised as an insured event. If the circumstances of the insured event or the event that
may be recognised as an insured event are investigated by state institutions, at the request
of the insurer, the institutions must provide free of charge the written information about
the facts established during the investigation and its findings.
5. If the event is an insured event and if the policyholder and the insurer disagree
on the amount of the insurance benefit, at the request of the policyholder, the insurer must
pay the amount on which the parties agree where establishment of an exact amount of the
benefit lasts for more than three months.
6. The insurer must prove the circumstances which release him from payment of
the insurance benefit or give him the right to reduce the benefit.
7. When the insurer refuses to pay the benefit or reduces it due to violation of the
insurance contract conditions by the policyholder, he must have regard to the
policyholder’s fault, the gravity of breach of the insurance contract, its causal relationship
with the insured event and the amount of loss resulting from the breach.
8. When the insurer refuses to pay the insurance benefit or reduces it, he must
provide a detailed and motivated explanation of the reasons for such a decision to the
policyholder, beneficiary or the injured party. Where the insurance benefit is not paid
within 30 days from the report about the insured event, the insurer must provide to the
policyholder/beneficiary a detailed account in writing about the progress of the
investigation of the insured event.
Article 83.Automatic Extension of the Period of Validity of the Insurance
Contract
1. Upon expiry of an insurance contract, in the cases provided for in the
insurance contract the validity period of the contract may be extended automatically but
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not for a longer period than one year unless a party to the contract expresses its
disagreement as to the extension of the contract.
2. In the case specified in paragraph 1 of this Article, the disagreement must be
stated by a party to the contract in writing at least one month before the expiry of the
period of validity of the insurance contract and where the validity period of the contract is
shorter than three months - before any other reasonable term agreed between the parties.
3. Conditions for an automatic extension of the validity period of the insurance
contract must be negotiated individually at the moment of concluding the insurance
contract.
Article 84. Settlement of the Insurer with the Policyholder after Termination
of the Insurance Contract
When determining conditions for the settlement between the parties after
termination of the insurance contract, account must be taken of the fault of a party for
breach of the contract conditions, the insurer’s administrative costs related to conclusion
and implementation of the contract, the insurance premium amounts paid for the period
which was not provided insurance cover, the unpaid insurance premium amounts for the
provided cover and other important circumstances.
Article 85. Obligations of the Beneficiary, Insured Person and Injured Party
1. An insurance contract may specify obligations of the beneficiary and the
injured party, which must be performed when exercising their right to the insurance
benefit, and the obligations of the insured person.
2. In exercising his rights, the insurer shall have no right to invoke noncompliance of the beneficiary, insured and injured party with their obligations under the
insurance contract, if they are unaware of conclusion of the contract and of their
obligations under the insurance contract, or if they do not have a possibility to perform
such obligations.
3. In exercising his rights, the insurer shall have the right to invoke the fact that the
policyholder failed to perform his obligation to duly inform the beneficiary, insured person
or the injured party about the concluded contract and their obligations.
SECTION TWO
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CHARACTERISTICS OF PROPERTY INSURANCE
Article 86. Policyholder, Insured Person and Beneficiary
A policyholder may conclude a contract for insurance of his own property
interests or the interests of another person who, upon conclusion of the insurance contract,
becomes the insured person. In property insurance, only the person whose property
interests have been covered shall be the beneficiary.
Article 87. Value of Property in Property Insurance
Where the value of property is not specified in the insurance contract, it shall be
considered that the value of property is its market value at the moment of conclusion of the
insurance contract.
Article 88. Insurance Benefit
The amount of the insurance benefit shall be equal to the amount of loss incurred
and/or other expenses (insurable interest) borne by the policyholder, insured person or
beneficiary due to an insured event unless it has been agreed between the parties that the
insurer must compensate only part of the loss/other expenses.
.
Article 89. Gross Negligence
An insurance contract may specify the cases where the insurer is released from
the obligation to pay the insurance benefit if the insured event occurs due to gross
negligence of the policyholder or the insured person. Such cases must be discussed
individually.
SECTION THREE
CHARACTERISTICS OF CIVIL LIABILITY INSURANCE
Article 90. Insured Person
A policyholder may conclude a civil liability insurance contract for insurance of
his own or another person’s property interests relating to civil liability; under the insurance
contract that other person becomes the insured person.
Article 91. Insured Event
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Unless the contract on civil liability insurance provides otherwise, the insured
event shall mean the policyholder’s or the insured person’s civil liability for the
consequences of the actions (act or omission) committed by the policyholder or the insured
person during the period of validity of the insurance contract even if such consequences
occurred after the expiry of the contract.
Article 92. Expenses Refunded by the Insurer
1. Unless the insurance contract provides otherwise, the insurer must refund
reasonable expenses incurred by the policyholder or the insured person borne while
rebutting the claim of the injured party for an indemnity. The expenses shall be refunded
even if it turns out later on that the claim was unfounded.
2. The insurer shall not be obliged to refund the expenses provided in paragraph
1 of this Article and shall have the right to require that the refunded expenses be returned
if the policyholder or the insured have caused loss to the injured party intentionally.
Article 93. Payment of the Benefit
1. The insurer shall pay the insurance benefit to the injured party, and where the
policyholder or the insured person compensated the loss caused to the injured party, the
insurer shall pay the insurance benefit to the policyholder or the insured person.
2. Where the sum insured is less than the joint loss caused to all injured parties,
the insurance benefit shall be distributed among the injured parties proportionately having
account of the amount of the loss.
Article 94. The Right of Direct Claim
The injured party shall have the right to claim directly that the insurer, who has
covered civil liability of the person liable for the loss, pays the benefit.
Article 95. Consequences of Payment of Insurance Benefit
When the insurer pays the benefit for the loss in the amount equal to part of the
sum insured, the insurer’s obligation shall continue until the expiry of the insurance
contract for the total sum insured without deductions of benefits paid, except for the cases
where the insurance contract provides that the insurer’s obligation remains in force only
for the remaining amount of the sum insured.
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Article 96. Insurer’s Right to Reclaim the Amounts Paid from the
Policyholder and the Insured
1. Where an insured event occurs, as specified in paragraph 3, Article 6.1014 of
the Civil Code, with the policyholder’s or the insured person’s intent, the insurer, upon
payment of the benefit, shall have the right to reclaim the amount paid from the
policyholder or the insured person.
2. In the cases specified in the civil liability insurance contract, where the
insured event occurs due to a gross negligence of the policyholder or the insured person,
the insurer, upon payment of the benefit, shall have the right of reclaim the amount paid or
its part from the policyholder or the insured person. This term of the insurance contract
must be negotiated individually.
Article 97. Transfer of an Object
1. Where a contract has been concluded on insurance of civil liability which may
arise when possessing, using or disposing an object with individual features, the insurance
contract shall expire when the owner of the object changes unless the contract provides
otherwise.
2. Where the insurance contract specifies several objects with individual
features, upon the change of the owner of one of these objects, insurance cover of property
interests relating to the object shall expire.
SECTION FOUR
CHARACTERISTICS OF LIFE ASSURANCE
Article 98. Conclusion of an Insurance Contract
1. The policyholder may conclude a life assurance contract for his own or any
other person’s property interests.
2. A life assurance contract shall be considered concluded for the benefit of the
person/the insured whose life is covered unless the contract provides another beneficiary.
3. A life assurance contract may be concluded for the benefit of the person who
is not the insured subject to consent of the insured in writing. Where the insured is under
18, or he has been recognised incompetent or of limited competence, the insurance
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contract may be concluded only for the benefit of the insured person except for the cases
where there the following conditions
1) the insured person is under 18;
2) the beneficiary named is a close relative of the insured;
3) the beneficiary is appointed in the event the insured person survives until
the expiry of the time period provided in the contract.
4. Transfer of the commitment of the annuity payer provided in 1 paragraph,
Article 6.448 of the Civil Code shall be possible where the annuity payer concludes an
insurance contract with the insurer and pays the premium in the amount of the annuity.
5. When concluding an insurance contract specified in paragraph 2, Article 6.289
of the Civil Code, the legal person in liquidation shall pay the premium to the insurer
while the insurer commits himself to pay periodical insurance benefits to the beneficiary –
the person to whom the legal person under liquidation has an obligation to compensate the
loss incurred as a result of injury or loss of life of the natural person.
Article 99. Information to the Policyholder of a Life Assurance Contract
1. Prior to conclusion of a life assurance contract, the insurer or his authorised
representative must provide to the policyholder information in writing specified in this
paragraph 1, Article 78 of this Law and, in addition, inform the policyholder in writing
about:
1) possible conditions of the insurance contract concerning the sums insured and
benefits which the policyholder is free to choose when concluding the insurance contract,
the amounts of premiums for each chosen variant of the sum assured and benefit;
2) possible terms of the assurance contract;
3) conditions and ways for the termination of the contract, including among
them the policyholder’s right to terminate the life assurance contract according to the
procedure specified in Article 107 of this Law on concessionary terms;
4) forms, procedures for and time periods of payment of premiums;
5) the procedure for and forms of determining the amount of insurance benefits
and the procedure of their payment;
6) the interest rate, the principles and ways of calculation of the insurer’s profit
share belonging to the policyholders and methods of the distribution of that profit share ,
the procedure for determining the surrender value and approximate amounts of the
surrender value, if a contract concluded is relating to capital accumulation;
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7) where an assurance contract is concluded under which the policyholder bears
investment risk - the objects into which investment may be made, their nature, income
from investments during the last three years;
8) essential information about taxation procedures applicable to insurance
contracts.
2. During the period of validity of the insurance contract, the insurer must
promptly notify the policyholder of the life assurance contract about:
1) any amendments of the insurer’s name, legal status or the office address, and
where the contract is concluded by a branch of the insurer - about changes in the
particulars relating to the branch;
2) any amendments of the information specified in paragraph 1 of this Article
where policy conditions or the law applicable to the insurance contract are amended.
3. Each year the insurer, within the time periods specified in the insurance
contract, must inform the policyholder in writing about the insurer’s profit share belonging
to the policyholder, the amount of the surrender where the contract concluded is related to
capital accumulation.
4. The information provided must be clear and readily understood.
5. The information shall be provided in the Lithuanian language or, at the
request of the policyholder and subject to the agreement with the insurer, - in any other
language.
Article 100. Insurance Risk
1. The insurer shall be prohibited from requesting in any form the policyholder,
insured person and other persons to provide to him data of genetic research.
2. The insurer, in executing the rights provided to him under law or the life
assurance contract, shall not invoke the following:
1) the policyholder has not performed the obligation under Article 6.993 of the
Civil Code due to negligence, if more than 10 years have passed since the conclusion of
the contract;
2) the policyholder has not performed the obligation under Article 6.1010 of the
Civil Code due to negligence, if more than 10 years have passed since the increase of the
risk.
3. The terms specified in paragraph 2 of this Article shall also be applied where
additional risks of health insurance are included in the life assurance contract.
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4. The insurer in exercising the rights granted to him by the life assurance
contract, during the validity period of the contract shall have no right to unilaterally
increase the premium where the insurance risk increases due to the policyholder’s or
insured person’s age and/or sickness, with the exception of cases where the policyholder or
the insured person causes his sickness deliberately.
5. In the cases specified in insurance contracts which must be negotiated
individually, the insurer shall have the right to unilaterally change the amount of the a
specified insurance premium only where this change relates to:
1) the change of the interest rate on domestic and international markets;
2) changed statistical data about insured events and insurance benefits.
6. It shall be permitted to unilaterally change the amount of the premium on the
grounds specified in paragraph 5 of this Article only where this change is not essential. In
defining whether the change is essential, it must be taken into account, whether the
policyholder (beneficiary) is not deprived, because of the essential change, of the
possibility to receive what he expected from the insurance contract.
7. Prior to a change of the premium, the policyholder must be given detailed
information in writing, specifying the reasons for the change of the premium and providing
conditions for him to terminate the insurance contract.
Article 101. Benefit Owing to Death of the Insured Person
Where the policyholder or the insured person in the cases specified in the life
assurance contract has not appointed the beneficiary, the benefits payable owing to the
insured person’s death shall be inherited according to the procedure specified by laws.
Article 102. Appointment and Replacement of the Beneficiary
1. The policyholder shall have the right to appoint one or several beneficiaries,
who, upon the occurrence of the insured event, shall acquire the right to the insurance
benefit or its part. The policyholder shall notify the insurer about the appointed beneficiary
in writing. Where the insured person is under 18 years of age, he has been is recognised
incapable or is of limited capability, the policyholder shall have no right to appoint the
beneficiary with the exception of the following cases:
1) the insured person is under 18 years of age;
2) the beneficiary to be appointed is a close relative of the insured person;
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3) the beneficiary is appointed in the event the insured person survives until the expiry
of the time period provided in the contract.
2. The policyholder shall have the right to appoint an irrevocable beneficiary.
The policyholder must also inform in writing the person appointed about his appointment
as the irrevocable beneficiary.
3. When appointing the beneficiary who is not the insured person, a written
consent of the insured person is obligatory, with the exception of the follo0wing cases:
1) where the insured person is under 18 years of age ;
2) the beneficiary to be appointed is a close relative of the insured person;
3) the beneficiary is appointed in the event the insured person survives until the expiry
of the time period provided in the contract.
4. Where the policyholder has appointed several beneficiaries without specifying the
individual amounts of benefit due to each beneficiary, upon occurrence of the insured
event, the beneficiaries shall have equal rights to the benefit.
5. The policyholder shall have the right to replace or revoke the beneficiary by notifying
the insurer in writing thereupon. When replacing the beneficiary by another beneficiary
who is not the insured person, a written consent of the insured person is obligatory, with
the exception of the following cases:
1) where the insured person is under 18 years of age ;
2) the beneficiary to be appointed is a close relative of the insured person;
3) the beneficiary is appointed in the event the insured person survives until the expiry
of the time period provided in the contract
6. The irrevocable beneficiary may be replaced or revoked only subject to his written
consent.
7. The beneficiary shall be considered appointed, replaced or revoked when he received
a written notification on the appointment, replacement or revocation of the beneficiary
from the policyholder, and has met the conditions specified in paragraphs 3, 5 and 6 of this
Article.
8. Where the policyholder specifies in his will how his insurance benefits are to be
inherited after his death, this request of the policyholder shall be equal to the appointment
or replacement of the beneficiary provided that insurer has been is informed thereupon in
writing by the policyholder or, upon his death, by his inheritors, and the provisions
specified in paragraphs 3, 5 and 6 of this Article have been met.
9. In the cases and according to the procedures specified in the insurance contract, the
insured person shall also have the right to appoint, replace and revoke the beneficiary. In
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such a case, appointment, replacement or revocation of the beneficiary shall be subject
mutatis mutandis to the provisions of this Article.
10. Where the beneficiary has been appointed, replaced or revoked disregarding the
provisions of this Article, the beneficiary’s appointment, replacement or revocation shall
be void except for the case of revocation of the beneficiary who is not an irrevocable
beneficiary, as provided in paragraph 4, Article 6.191 of the Civil Code.
11. Upon the occurrence of the insured event, the beneficiary, appointed only according
to the procedure specified in this Article, shall acquire the right to the benefit.
Article 103. Exceptions in the Application of the Civil Code
The Civil Code provisions on insurance in excess of the insurance value (Article
6.1001), insurance against different risks (Article 6.1002) and on the transfer of the
policyholder’s rights to compensation of loss to the insurer (Article 6.1015) shall not apply
to the life assurance contract.
Article 104. Benefit
1. The benefit under an insurance contract shall be paid with no regard to the
policyholder’s or beneficiary’s income from other sources.
2. The insurer shall have the right to reduce the benefit by the amount of the
premiums not paid for suspension of the term of insurance cover and the amount of
income which would have been received from their investment.
Article 105. Policyholder’s Right to Refuse Payment of Premiums
1. When during the validity period of the life assurance contract related to capital
accumulation the minimum amount, if specified in the insurance contract, is accumulated,
the policyholder shall have the right not to pay the premium. In this case the life assurance
contract shall stay in force for the remaining validity period of the contract and benefits
under the contract shall be adjusted following the procedure specified in the contract,
taking into account the accumulated minimum amount.
2. The policyholder’s right provided in paragraph 1 of this Article shall be
exercised according to the procedure specified in the life assurance contract.
Article 106. Insurer’s Right to Terminate the Insurance Contract
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The insurer shall have the right to unilaterally terminate the life assurance
contract only in the event of an essential breach of the conditions of the contract and in the
case specified in paragraph 1, Article 6.1009. of the Civil Code.
Article 107. Termination of Insurance Contract on Concessionary Terms
1. Where the policyholder who is a natural person unilaterally terminates a life
assurance contract by notifying in writing the insurer within 30 days from the moment he
was informed about the concluded contract, the insurer must reimburse the total premium
which has been paid, with the exception of cases where the term of the life assurance
contract is six months or less.
2. Upon termination of a life assurance contract by the policyholder who is a
natural person in the case specified in paragraph 1 of this Article, no obligations related to
the insurance contract may arise.
Article 108. Reimbursement of Premium Upon Termination of the
Insurance Contract
The insurance contract may specify the cases and procedure, where a life assurance
contract related to capital accumulation, terminated by the insurer because the policyholder
has not paid the premium, shall be renewed where the policyholder, within 6 months from
the termination of the contract, reimburses the surrender value paid by the insurer.
Article 109. Payment of Surrender Value
1. Where a life assurance contract related to capital accumulation is terminated
or otherwise expires before the term, or where the insurer exercises the right granted by
laws or the insurance contract to refuse payment of the benefit or to reduce it, the amount
paid to the policyholder must not be less than the surrender value.
2. Where upon recognition of a life assurance as invalid, restitution is due for the
benefit of the policyholder, the insurer must return to the policyholder the surrender value
if it is higher than the premiums paid by the policyholder.
3. The procedure for the calculation and payment of the surrender value as well
as approximate amounts of the surrender value must be specified in the life assurance
contract.
Article 110. Transfer of Property Rights Arising From Insurance Contract
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1. According to procedure specified in a life assurance contract, the policyholder
and the beneficiary may transfer the property rights arising from the insurance contract to
another person.
2. Upon the transfer of the rights arising from the life assurance contract,
appointment of the beneficiary, except for the irrevocable beneficiary, shall become void.
Article 111. Mortgage of the Property Rights Arising From Insurance
Contract
1. The policyholder, in order to ensure performance of the obligation, may
mortgage the property rights arising from the life assurance contract related to capital
accumulation: the right to the benefit and the right to the surrender value.
2. The beneficiary may mortgage the right to the benefit only upon occurrence of
the insured event.
3. The insurer shall be informed in writing of the mortgage of the property rights
arising from the insurance contract.
4. The claim of the mortgagee may be satisfied from the insurance benefit only
upon the occurrence of the insured event. The insurer must satisfy the claim of the
mortgagee from the insurance benefit only upon expiry of the time period specified in
paragraph 2, Article 82 of this Law.
5. The mortgagee shall have priority against the beneficiary for the satisfaction
of his claim, save for the case where the beneficiary is irrevocable. Where the irrevocable
beneficiary was appointed after the pledge of the property rights arising from the insurance
contract, the mortgagee shall have priority against the irrevocable beneficiary for the
satisfaction of his claim.
6. After the insurer satisfies the mortgagee’s claim, the surrender value or the
insurance benefit shall be reduced by an amount equal to the amount of the mortgagee’s
claims satisfied by the insurer.
SECTION FIVE
CHARACTERISTICS OF HEALTH INSURANCE
Article 112. Insured Person
1. The policyholder may conclude an insurance contract for the cover of his
health related property interests or the property interests of another person who, upon
conclusion of the contract becomes the insured person.
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2. If health insurance is insurance against loss, only the insured person may be
the beneficiary, and in the event of his death - the appointed beneficiary.
Article 113. Application of Other Provisions of This Law
1. Provisions of paragraph 1, Article 100, and Articles 101, 102 and 106 of this
Law shall be applicable mutatis mutandis to a health insurance contract.
2. If the health insurance contract is a contract of insurance of amounts,
provisions of this Law Article 98, 103 and 104 shall be applicable to it mutatis mutandis ,
however the provisions of the Civil Code concerning underinsurance (Article 6.999) and
supplementary insurance (Article 6.1000)shall not apply to it.
Article 114. Insurance Risk
1. In executing the rights granted by law and the health insurance contract, the
insurer may not invoke the facts that:
1) the policyholder has not fulfilled the obligation specified in Article 6.993 of
the Civil Code due to negligence, if more than five years have passed since conclusion of
the insurance contract;
2) the policyholder has not fulfilled the obligation specified in Article 6.1010 of
the Civil Code due to negligence, if more than five years have passed since the risk
increase;
2. The insurer, in executing the rights granted by the life assurance contract,
during the validity period of the insurance contract, the insurer shall have no right to
unilaterally increase the premium when the insurance risk increases due to the age and
sickness of the policyholder or of the insured person, save for the cases where the
policyholder or the insured person causes his sickness intentionally.
SECTION SIX
CO-INSURANCE
Article 115. Participation in Co-insurance
1. Mutual rights and obligations of the insurers participating in coinsurance shall
be established in the contract where the following conditions shall be stated:
1) the insurer who is appointed leading insurer;
2) the fee of the leading insurer for the administration of co-insurance contracts,
unless otherwise agreed;
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3) the share of insurance risk in percentage assumed by each insurer;
4) the procedure of distribution of insurance premiums received under the coinsurance contract;
5) the procedure for communicating by the leading insurer to the other insurers
of the information relating to co-insurance contract;
6) one of the ways for paying out the insurance benefit as specified in paragraph
5 of this Article;
7) the procedure for effecting by the insurers settlement with the leading insurer
if one of the ways for paying out the insurance benefit specified in paragraph 5(1) of this
Article is applied;
8) the procedure and conditions of the insurer’s withdrawal from co-insurance.
2. The leading insurer shall exercise all the rights and obligations of the insurer,
unless this Law provides otherwise.
3. An insurance contract shall be concluded according to the terms and
conditions prepared by the principal insurer.
4. The insurance policy issued by the leading insurer, in addition to the insurance
policy particulars prescribed by paragraph 1 of Article 6.991 of the Civil Code, must
contain the following information:
1) the name and registered office address of the leading insurer;
2) the names and registered office addresses of other insurers participating in cinsurance;
3) share of insurance risk in percentage assumed by each insurer;
4) one of the ways of payment of insurance benefit provided for in paragraph 5 of
this Article;
5) signatures and seals of all the insurers, if their mutual contract provides that the
insurance policy shall be signed not only by the leading insurer but also by all other
insurers.
5. Insurance benefit, according to the co-insurance contract, shall be paid out in one
of the following ways, which must be specified in the insurance contract:
1) the leading insurer shall pay out the insurance benefit on his own behalf and on
behalf of other insurers participating in co-insurance;
2) each insurer participating in the co-insurance shall pay out the amount of
insurance benefit in proportion to the share of insurance risk assumed.
6. If it is established in the insurance contract that the leading insurer pays out the
insurance benefit on its own behalf and on behalf of other insurers participating in co88
insurance, the policyholder, beneficiary or any injured party must apply to the leading
insurer for the payment of insurance benefit.
7. If it is established in the insurance contract that each insurer participating in coinsurance shall pay the amount of the insurance benefit in proportion to the assumed share
of insurance risk, after the leading insurer has stated the fact of the insured event and the
amount of the insurance benefit and decided upon the payment thereof, the policyholder,
beneficiary or any injured party must apply to each insurer participating in co-insurance
for the payment of insurance benefit taking into account the share of insurance risk
assumed by them. In the event of a dispute between the policyholder, beneficiary or any
injured party and one of the insurers regarding the payment of a share of the insurance
benefit, the said insurer shall be the defendant in court.
8. The leading insurer’s decision concerning the existence or non-existence of the
insured event, the amount of the insurance benefit and decision to pay the insurance
benefit shall be binding on the insurers participating in co-insurance.
Article 116. Co-insurance in the European Union Member States
1. The provisions of Article 115 of this Law shall not apply to co-insurance
operations in the European Union Member States by insurance undertakings and insurance
undertakings of other European Union Member States, which satisfy the following
conditions:
1) co-insurance contract shall be concluded for covering the risks of insurance
classes referred to in subparagraphs 3 to 13 and 16 of paragraph 3, Article 7 of this Law,
except for the risks of insurance class referred to in subparagraph 13, paragraph 3 of
Article 7 of this Law which concern damage arising from the use of nuclear sources or
from medicines or other medicinal products;
2) co-insurance contract is concluded only for covering large insurance risks which
by reason of their nature or size call for the participation of several insurers for their
coverage;
3) insurance risk is covered by a single insurance contract for the period specified
in the contract at an overall premium provided in the contract and by two or more insurers
each of whom assumes a share of insurance risk and one of whom is the leading insurer;
4) insurance risk is situated within a European Union Member State or Member
States;
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5) the leading insurer complies with the requirements set in this Article and
according to the status defined by the contract concluded between the insurers the leading
insurer is treated as if he were the insurer covering the whole risk;
6) at least one of the co-insurers participates in the contract by means of a head
office or branch established in any other European Union Member State other than that of
the leading insurer;
7) the leading insurer fully assumes the rights and obligations of the leading insurer
and in particular has the right to determine the terms and conditions of the insurance
contract and the amount of the insurance premium.
2. The requirements provided for in Articles 53 or 57 of this Law shall be applied
to the leading insurer.
3. The determination of the technical provisions of insurance undertakings of the
Republic of Lithuania and branches of non-member-country insurance undertakings
established in the Republic of Lithuania, which participate in co-insurance in the European
Union, the representation of the technical provisions by matching assets, communication
of statistical data and other information to the Supervisory Commission shall be subject to
the provisions of the laws of the Republic of Lithuania.
4. The Supervisory Commission shall co-operate with the European Commission
and the competent authorities of other European Union Member States for the purpose of
examining any difficulties which might arise in implementing the provisions of this
Article, compliance with the provisions of this Article and in observing any practices
which might indicate that the purpose of the provisions is being misused either in that the
leading insurer does not assume the leader's role in co-insurance practice or the risks
clearly do not require the participation of two or more insurers for their coverage.
CHAPTER VI
LAW APPLICABLE TO INSURANCE CONTRACTS
Article 117. Application of Provisions of this Chapter
This Chapter shall establish the law applicable to non-life insurance contracts that
cover the risks within the European Union Member States, to compulsory insurance
contracts where a European Union Member State provides for the commitment to conclude
an insurance contract as well as the law applicable to life assurance contracts where the
policy holder has his habitual residence or, if the policy holder is a legal person, the latter's
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head office, to which the life assurance contract relates, is situated in a European Union
Member State.
Article 118. Mandatory Rules of the Law
The mandatory rules of the law of the European Union Member State of the
commitment under the assurance contract where the insurance risk is situated or of the
European Union Member State which stipulates the commitment to conclude the contract
shall be applied whatever the law applicable to the contract.
Article 119. The Law Applicable to Non-life Insurance Contracts
1. This Article shall set out the law applicable to non-life insurance contracts
which cover insurance risks situated in the European Union Member States, where the
parties to the non-life insurance contract have not chosen the law applicable.
2. Where the policyholder has his habitual residence or the policy holder has his
head office in a European Union Member State in which the insurance risk is situated, the
law of that Member State shall be applied, or, where the law of that Member State so
allows, the parties may choose the law of any other state.
3. Where the policyholder has his habitual residence or head office not in the same
European Union Member State where the insurance risk is present, the parties to the
insurance contract may choose either the law of the Member State in which the insurance
risk is situated or the law of the Member State in which the policyholder has his habitual
residence or head office.
4. Where the policyholder is engaged in commercial economic activities or
operates as a self-employed person, the parties to the insurance contract covering
insurance risks related to the activity of the policyholder which are situated in differed
European Union Member States may choose the law of any of these Member States or the
law of the Member State in which the policyholder has his habitual residence or its head
office.
5. Notwithstanding the provisions of paragraphs 2, 3 and 4 of this Article, in
concluding an insurance contract in respect of insured events which may occur in a
European Union Member State other than the Member State where the risk is situated, the
parties to the insurance contract may choose the law of the first Member State.
6. The parties to insurance contracts by virtue of their size shall be granted freedom
to choose the law applicable.
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7. The fact that the parties to an insurance contract have chosen the applicable law
in cases defined under paragraphs 2 and 6 of this Article shall not affect the application of
the mandatory rules of law of the European Union Member State to which all other
circumstances applicable when choosing the law are connected.
8. Agreement of the parties to an insurance contract over the applicable law must
be implicitly or explicitly indicated in the terms and conditions of the insurance contract or
must be clearly presumable from concrete circumstances. Where this is not the case or
where the parties to the insurance contact have not chosen the applicable law, the law of
the state referred to in the previous paragraphs of this Article, with which the insurance
contract is most closely connected shall be applied. However, a substantial part of the
insurance contract which is more closely connected with a state other than those referred to
in paragraphs 1 to 5 of this Article may, by way of exception, be subject to the law of that
state. It shall be presumed that an insurance contract is most closely connected with the
law of the European Union Member State where the insurance risk is situated.
9. Where an insurance contract is concluded for covering insurance risks situated in
more than one Member State, for the purpose of this paragraph the insurance contract shall
be deemed to consist of several insurance contracts each of which is connected only with
one Member State.
Article 120. Law Applicable to Compulsory Insurance Contracts
1. A compulsory insurance contract shall be subject to the law of the Member State
which provides for the obligation to conclude the insurance contract.
2. Where the laws of the Republic of Lithuania provides for the obligation to
conclude an insurance contract, this obligation shall not be deemed properly discharged
where the concluded insurance contract does not comply with the provisions of the legal
acts of the Republic of Lithuania which are applicable to such insurance.
3. Where in cases of compulsory insurance the law of the Member State in which
insurance risk is situated is contrary to the law of the Member State which provides for the
obligation to conclude an insurance contract the law of the latter state shall be applied.
4. Where an insurance contract is concluded for covering risks situated in more
than one European Union Member State, and at least one of them stipulates compulsory
insurance, for the purpose of paragraph 2 of this Article the insurance contract shall be
deemed to consist of several insurance contracts each of which is connected only with one
Member State.
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5. Where a Member State provides for compulsory insurance and the policyholder
is obliged to notify the competent authorities about the termination of insurance protection,
the insurance protection shall have legal effects on the third persons only under the
circumstances specified in the legal acts of that European Union Member State.
Article 121. Law Applicable to Life Assurance Contracts
1. This Article shall specify the law applicable to life assurance contracts, where
the parties to the life assurance contract have not chosen the law applicable to the
insurance contract.
2. The law applicable to life assurance contracts stipulated in this Article shall be
the law of the Member State of the commitment.
3. Where the policyholder has his habitual residence in a European Union Member
State other than that of which he is a national, the parties to the insurance contract may
choose the law of the Member State of which the policyholder is a national.
CHAPTER VII
INTERVENTION MEASURES, WINDING-UP, REORGANISATION AND
BANKRUPTCY
SECTION ONE
INTERVENTION MEASURES
Article 122. Application of the Provisions of this Section
1. This Section regulates application of intervention measures to:
1) insurance undertakings of the Republic of Lithuania and their branches
established in the Member States of the European Union;
2) branches of non-member-country insurance undertakings established in the
Republic of Lithuania. subparagraphs 1 to 8 of paragraph 1 of Article 2.131 of the Civil
Code shall be considered as intervention measures provided that they meet the criteria set
forth in Article 2(36) of this Law.
3. Measures provided for in subparagraphs 5 and 9 of Article 197 of this Law
imposed by the Supervisory Commission and other measures, which are intervention
measures as indicated during their application by the Supervisory Commission upon
considering their possible effects.
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Article 123. Intervention measures
1. Only the court or the Supervisory Commission shall have the right to pass a
decision concerning imposition of intervention measures.
2. The law of the Republic of Lithuania shall be applicable to intervention
measures.
Article 124. Information about Intervention Measures
1. The Supervisory Commission, upon receipt of the experts’ report and
recommendations, as specified in paragraph 2 of Article 2.130 of the Civil Code, shall
submit to the court a conclusion regarding the intervention measures which the court
intends to impose. Having passed a decision to impose a measure involving intervention,
the court shall forthwith notify the Supervisory Commission of the decision made and of
its coming into effect.
2. The Supervisory Commission inform as a matter of urgency the competent
authorities of the other European Union Member States of the decision of the court or the
Supervisory Commission to impose a measure involving intervention and of the coming
into effect of the decision indicating the possible effects of the measure on natural or legal
persons of the other Member State. Where possible, the Supervisory Commission must
inform the competent authorities of the other Member States thereof before the passing of
a decision to impose a measure involving intervention.
3. The court or the Supervisory Commission shall, upon passing the decision to
impose a measure involving intervention, immediately publish the operative part of the
decision in the supplement Informaciniai Pranešimai of the state gazette Valstybės žinios.
4. The Supervisory Commission must immediately publish the operative part of the
decision in question in the Official Journal of the European Communities.
5. Notification referred to in paragraphs 3 and 4 of this Article shall specify the
institution which has passed the decision to impose the measure involving intervention
right to instruct the insurance undertaking or the branch of the non-member-country
insurance undertaking to inform the above persons of the measure involving intervention.
SECTION TWO
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WINDING-UP, REORGANISATION AND BANKRUPTCY OF
INSURANCE UNDERTAKINGS AND TERMINATION OF ACTIVITIES OF
BRANCHES OF NON-MEMBER-COUNTRY INSURANCE UNDERTAKINGS
Article 125. Winding-up, Reorganisation and Bankruptcy of Insurance
Undertakings
1. Reorganisation of an insurance undertaking upon the decision of the general
meeting of shareholders, its restructuring shall be effected upon the authorisation of the
Supervisory Commission, granted in the manner prescribed by the Supervisory
Commission. Where the insurance undertaking is reorganised by the order of the court,
before issuing the said order, the court shall receive the conclusion of the Supervisory
Commission.
2. The Supervisory Commission shall have the right to obligate the insurance
undertaking to inform the interested persons about the reorganisation, restructuring and
change of the type of activity and, having regard to the provisions of Article 133 of this
Law, to establish the procedure for the submission of information.
Article 126. Voluntary Liquidation of an Insurance Undertaking
1. The general meeting of shareholders of the insurance undertaking shall have the
right to take a decision to liquidate the insurance undertaking only where the insurance
undertaking has transferred its rights and obligations under insurance contracts in
accordance with the procedure laid down in this Law and has been granted authorisation
by the Supervisory Commission, in accordance with the procedure established by the
Supervisory Commission, to liquidate the insurance undertaking.
2. The Supervisory Commission shall take a decision regarding the granting of the
authorisation within 30 working days from the submission of all necessary and properly
executed documents.
3. Before a person is appointed liquidator, member or chairman of the liquidation
commission, an approval of the person's candidature by Supervisory Commission must be
received in accordance with the procedure established by the Supervisory Commission.
The Supervisory Commission shall take a decision on the approval of the candidature
within 30 working days from the submission of all necessary and properly executed
documents.
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4. The insurance undertaking shall within three working day notify the Supervisory
Commission in writing of the decision taken to liquidate the insurance undertaking and to
appoint the liquidator or to set up the liquidation commission and appoint its chairman.
Article 127. Application to Initiate Investigation of Insurance Undertaking’s
Activity
1. Upon revoking insurance activity license, the Supervisory Commission shall
obligate the insurance undertaking to transfer its rights and obligations under insurance
contracts and set the deadline for the transfer.
2. An insurance undertaking having rights and obligations under insurance
contracts shall have no right to engage in any other commercial activities.
3. If the insurance undertaking fails to transfer its rights and obligations under
insurance contracts within the time period set by the Supervisory Commission, the latter
shall apply to the prosecutor for initiating investigation of activities of the insurance
undertaking following the procedure prescribed by Articles 2.124 through 2.131 of the
Civil Code.
Article 128. Compulsory Liquidation of an Insurance Undertaking
1. Before passing a decision regarding compulsory liquidation of an insurance
undertaking on the grounds laid down in Article 2.106 of the Civil Code, the court must
inform the Supervisory Commission thereof and receive its conclusion regarding
compulsory liquidation of the insurance undertaking.
2. The Supervisory Commission shall nominate to the court the candidates to the
post of a liquidator or liquidation commission and its chairperson. Having passed a
decision to liquidate an insurance undertaking, to appoint a liquidator or liquidation
commission and its chairperson, the court must notify the Supervisory Commission thereof
in writing within three working days.
Article 129. Bankruptcy of an Insurance Undertaking
1. The insurance undertaking bankruptcy case shall be heard in accordance with the
procedure laid down by the Law on Enterprise Bankruptcy, unless this Law provides
otherwise.
2. The bankruptcy proceedings in respect of an insurance undertaking shall be
conducted only in court. The petition for bankruptcy shall be filed with the court by the
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Supervisory Commission. The court shall within seven days consider the petition for
bankruptcy filed by the Supervisory Commission.
3. If the petition for bankruptcy is filed by other persons according to the procedure
laid down by law, before passing a decision to institute bankruptcy proceedings the court
must receive a conclusion from the Supervisory Commission regarding the insolvency of
the insurance undertaking.
4. The Supervisory Commission shall nominate to the court a candidate to the post
of the administrator.
5. Having passed a decision to institute bankruptcy proceedings against the
insurance undertaking, the court must notify the Supervisory Commission thereof in
writing within three working days.
6. No meetings of the insurers and other creditors shall be called during the
investigation of the bankruptcy case of an insurance undertaking. The interests of said
persons shall be represented by a committee of creditors' representatives formed by the
Supervisory Commission. The committee shall consist of no more than 15 persons drawn
from the insurers, policyholders, beneficiaries, injured party, other creditors and
representatives of the Supervisory Commission. The regulations of the committee of the
representatives of creditors shall be approved by the Supervisory Commission.
7. The first meeting of the committee of creditors' representatives shall be called by
the Supervisory Commission or, by the order of the Supervisory Commission, the
administrator.
Article 130. Reorganisation of a Non-Member-Country Insurance
Undertaking Related to a Branch Established in the Republic of Lithuania
1. Reorganisation of a non-member-country insurance undertaking may have legal
consequences for the interests of the policyholders, insured, beneficiaries and injured party
of a branch of this undertaking established in the Republic of Lithuania only upon the
granting of authorisation by the Supervisory Commission.
2. The Supervisory Commission shall have the right to obligate a non-membercountry branch of an insurance undertaking to inform about the reorganisation procedures
and, having regard to the provisions of Article 133 of this Law, to establish the procedure
for the submission of information.
Article 131. Termination of Activities of a Non-Member-Country Branch of
an Insurance Undertaking Established in the Republic of Lithuania
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1. A non-member-country insurance undertaking shall have the right to take a
decision to terminate the activities of a branch established in the Republic of Lithuania
only upon delegating, in the manner prescribed by this Law, its rights and obligations
under insurance contracts concluded by the branch and upon being granted authorisation
by the Supervisory Commission.
2. The Supervisory Commission shall take a decision regarding the granting of the
authorisation within 30 working days from the submission of all necessary and properly
executed documents.
3. Having made a decision to terminate the activities of a branch, the non-membercountry insurance undertaking must appoint a person responsible for the termination of
activities of the branch. Before appointing a person responsible for the termination of
activities of the branch, the non-member-country insurance undertaking must obtain the
Supervisory Commission's approval of the nominee in the manner prescribed by the
Supervisory Commission. The Supervisory Commission shall take a decision on the
approval of the nominee within 30 working days from the submission of all necessary and
properly executed documents.
4. Any decision to terminate the activities of a branch of a non-member-country
insurance undertaking and to appoint a person responsible for the termination of activities
of the branch must be presented by the non-member-country insurance undertaking in
writing to the Supervisory Commission within three working days.
Article 132. Compulsory Termination of Activities of a Branch of a NonMember-Country Insurance Undertaking Established in the Republic of Lithuania
1. The activities of a branch of a non-member-country insurance undertaking
established in the Republic of Lithuania, shall be terminated in a compulsory manner after
the Supervisory Commission adopts the decision to revoke the authorisation granted to the
branch to engage in insurance activities. In this case the Supervisory Commission shall
nominate the person responsible for the termination of activities.
2. If, in accordance with the procedure established by law, other institutions of the
Republic of Lithuania intend to pass a decision to terminate the activities of a branch of a
non-member-country insurance undertaking established in the Republic of Lithuania, the
Supervisory Commission shall submit the candidature of the person responsible for the
termination of activities. Having passed the decision to terminate the activities of a branch
of a non-member-country insurance undertaking and appoint the person responsible for the
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termination of activities, the state institution must notify the Supervisory Commission
thereof in writing within three working days.
Article 133. Information Related with Liquidation and Bankruptcy Case of an
Insurance Undertaking and Termination of Activities of a Branch of a Non-memberCountry Insurance Undertaking
1. The Supervisory Commission shall immediately inform the competent
authorities of other European Union Member States about the adopted decision to liquidate
the insurance undertaking, terminate the activities of a branch a non-member-country
insurance undertaking or to institute bankruptcy proceedings against the insurance
undertaking, indicating possible consequences of the above actions for natural or legal
persons of this European Union Member State.
2. Where possible, the Supervisory Commission shall notify the competent
authority of any other European Union Member State before the decision to liquidate the
insurance undertaking, to terminate the activities of a branch of a non-member-country
insurance undertaking or to institute bankruptcy proceedings against the insurance
undertaking is adopted.
3. The liquidator of the insurance undertaking in liquidation, the chairman of the
liquidation commission, the person responsible for the termination of activities of a branch
of a non-member-country insurance undertaking and the administrator of the insurance
undertaking in bankruptcy shall without delay publish the decision to liquidate the
insurance undertaking, to terminate the activities of a branch of the non-member-country
insurance undertaking or to institute bankruptcy proceedings against the insurance
undertaking in the supplement Informaciniai pranešimai of the state gazette Valstybės
žinios.
4. The liquidator of the insurance undertaking in liquidation, the chairman of the
liquidation commission, the person responsible for the termination of activities of a branch
of a non-member-country insurance undertaking and the administrator of the insurance
undertaking in bankruptcy shall without delay publish an excerpt from the adopted
decision in the Official Journal of the European Communities. In addition to other
information, the announcement shall contain the address and other contact information of
the liquidator of the insurance undertaking in liquidation, the chairman of the liquidation
commission, the person responsible for the termination of activities of a branch of a nonmember-country insurance undertaking and the administrator of the insurance undertaking
in bankruptcy as well as the law which is applied to liquidation or bankruptcy procedures.
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5. The liquidator of the insurance undertaking in liquidation, the chairman of the
liquidation commission, the person responsible for the termination of activities of a branch
of a non-member-country insurance undertaking and the administrator of the insurance
undertaking in bankruptcy shall without delay notify in writing every known creditor
whose habitual residence is in any other European Union Member State about the decision
to liquidate the insurance undertaking, to terminate the activities of the branch of a nonmember-country insurance undertaking or to institute bankruptcy proceedings against the
insurance undertaking. The information must indicate the following:
1) the time period and the procedure for filing the creditor's claim and the entity
with whom the claim shall be filed;
2) legal consequences of failure to file or late filing of creditors' claims;
3) the ranking of the creditor’s credit claims and the measures to secure a credit
claim;
4) consequences for insurance contracts of liquidation and bankruptcy of an
insurance undertaking, termination of activities of a branch of a non-member-country
insurance undertaking and the moment of expiry of rights and obligations related with the
insurance contract.
6. The information referred to in paragraph 5 of this Article shall be presented in
the Lithuanian language and the national language or one of national languages of a
European Union Member State. The document shall be under the heading “Invitation and
Deadline for Filing Credit Claims” in all official languages of the European Union. If the
creditor’s credit claim arises from the insurance contract, the information shall be
submitted in the national language or in one of the national language of a European Union
Member State where the creditor has his habitual residence or head office.
7. A creditor who has a habitual residence in any other European Union Member
State, while exercising the right to file a credit claim must submit copies of documents
confirming credit claims (if any), indicate the date when the credit claim arose, the amount
of credit claim and means whereby credit claim is secured. The creditor’s information shall
be submitted in the national language or one of the national languages of the European
Union Member State where the creditor has his habitual residence or head office.
However, the information must contain the heading Kreditorinis reikalavimas (Credit
claim) or Pastabos dėl kreditorinio reikalavimo (Comments concerning credit claim) in
the Lithuanian language.
8. The liquidator of the undertaking in liquidation, the chairman of the liquidation
commission, the person responsible for the termination of activities of a branch of a non100
member-country insurance undertaking or the administrator of the undertaking in
bankruptcy must properly and on a regular basis inform creditors about the progress of
liquidation or bankruptcy procedures.
9. The liquidator of the undertaking in liquidation, the chairman of the liquidation
commission, the person responsible for the termination of activities of a branch of a nonmember-country insurance undertaking or the administrator of the undertaking in
bankruptcy must submit information to the Supervisory Commission in the manner
established by the Supervisory Commission.
10. The Supervisory Commission, upon the request of the competent authority of
any other European Union Member State, must present information about liquidation of an
insurance undertaking, termination of activities of a branch of a non-member-country
insurance undertaking of or bankruptcy of the insurance undertaking.
Article 134. Use of Assets Covering Insurance Technical Provisions of an
Insurance Undertaking in Liquidation or in Bankruptcy or a Branch of a NonMember-Country Insurance Undertaking whose Activities are Terminated
1. Assets covering insurance technical provisions of an insurance undertaking in
liquidation or in bankruptcy or a branch of a non-member-country insurance undertaking,
whose activities are terminated, which are included in the list specified in Article 35(7) of
this Law may only be used to satisfy credit claims of the policyholders, insured,
beneficiaries and injured party, which arise from insurance contracts, save for the
exception indicated in paragraph 4 of this Article. Assets that cover insurance technical
provisions and funds received following assignment of the funds may not be used for
recovery under other liabilities of an insurance undertaking or a branch of a non-membercountry insurance undertaking.
2. If assets covering insurance technical provisions are not sufficient to satisfy all
credit claims arising under insurance contracts of the insurance undertaking in liquidation
or in bankruptcy or of a branch of a non-member-country insurance undertaking whose
activities are being terminated , the said claims shall be satisfied in proportion to the sum
which is due to every creditor.
3. Funds other than assets covering technical provisions of the insurance
undertaking or a branch of a non-member-country insurance undertaking shall be used to
satisfy credit claims of creditors referred to in paragraph 1 of this Article, whose claims
were not fully satisfied from the assets covering insurance technical provisions and of all
other creditors in the manner established by law. The balance of funds of insurance
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technical provisions which remains after satisfying credit claims of creditors referred to in
paragraph 1 of this Article, shall also be used to satisfy claims of all other creditors in the
manner established by law.
4. If assets, other than those covering insurance technical provisions of the
insurance undertaking in bankruptcy, prove not sufficient to cover administrative
expenses, the court, upon the proposal of the committee of creditors’ representatives,
having regard to the opinion of the Supervisory Commission, upon the administrator's
request shall have the right to allocate up to 10% of assets covering insurance technical
provisions for administrative expenses of the insurance undertaking in bankruptcy.
Article 135. Termination of Insurance Contracts of Insurance Undertakings in
Bankruptcy
1. Following the institution of bankruptcy proceedings, non-life insurance contracts
shall terminate. The policyholders of these contracts shall acquire the right of credit claim
to the paid share of the insurance premium for the period from the institution of
bankruptcy proceedings until the end of the period of the insurance contract provided for
in the insurance contract.
2. If after the effective date of the court ruling concerning the institution of
bankruptcy proceedings the rights and obligations under the life assurance contracts are
not transferred within the time period specified by the Supervisory Commission, these
contracts shall terminate.
Article 136. Termination of Contracts Concluded by Branches of NonMember-Country Insurance Undertakings
1. Upon the revocation by the Supervisory Commission of the authorisation of a
branch of non-member-country insurance undertaking because the branch’s liabilities
exceed the assets assigned to it, all non-life insurance contracts shall be terminated. The
policyholders under those contracts shall acquire the right of credit claim to the share of
the paid premium for the period from the revocation of the authorisation to engage in
insurance activities to the date of termination of the insurance contract provided for in the
contract.
2. If the rights and obligations under life assurance contracts are not transferred
from the moment of revocation of the authorisation to engage in insurance activities until
the termination of the time period set by the Supervisory Commission, such contracts shall
terminate.
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3. If after the revocation of the authorisation to engage in insurance activities the
branch’s liabilities exceed the assets assigned to the branch, the Supervisory Commission
shall state this fact by a resolution. In such case non-life insurance contracts shall
terminate; if the rights and obligations under life assurance contracts are not transferred
within the time period set by the Supervisory Commission, these contracts shall terminate.
Article 137. Policyholders’ Credit Claims after Termination of Life Assurance
Contracts
1. Each policyholder of life assurance contracts which have expired due to reasons
specified in Article 135 or 136 of this Law shall acquire the right of credit claim against an
insurance undertaking or against a branch of a non-member-country insurance
undertaking.
2. Where a life assurance contract has been concluded only for covering a death
risk, the policyholders shall acquire the right of credit claim to the share of the paid
premium for the period from the termination of the insurance contract for reasons specified
in Article 135 or 136 of this Law to the expiry of the period of the insurance contract
provided for in the contract.
3. The amount of the policyholders’ credit claim in case of a life assurance contract
with capital savings shall equal the amount of technical provisions established for the
contracts concluded by the policyholders as for the day the contract termination.
Article 138. Characteristics of Transfer of Rights and Obligations under Life
Assurance Contracts of an Insurance Undertaking in Bankruptcy
1. When transferring the rights and obligations under the life assurance contracts
concluded by an insurance undertaking in bankruptcy, a 30-day time period shall be
applied instead of the time periods specified in Articles 41(5) and 42(1, 3) of this Law.
2. When transferring the rights and obligations under life assurance contracts of the
insurance undertaking in bankruptcy, subparagraph 2 of Article 42(3) of this Law shall
apply taking into account the exceptions specified in this Article.
3. When transferring the rights and obligations under life assurance contracts of the
insurance undertaking in bankruptcy, subparagraph 4 of Article 42(3) of this Law shall not
apply, but the mandatory precondition for the granting of authorisation by the Supervisory
Commission for the transfer of the rights and obligations shall be safeguarding of property
interests of policyholders, insured, beneficiaries and injured party related to the insurance
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undertaking facing bankruptcy, which is feasible only under the specific circumstances of
the bankruptcy case.
4. Where the assets covering the insurance technical provisions of the insurance
undertaking in bankruptcy prove insufficient to satisfy credit claims arising from life
assurance capital saving contracts, the insurance undertaking in bankruptcy, transferring
the rights and obligations under life assurance contracts, shall have the right to transfer
only a part of the obligation concerning claim payment and payment of redeemable sum.
In such case the contract for the transfer of rights and obligations must specify the share of
the claim payment and redeemable sum which the entity taking over the rights and
obligations under insurance contracts must pay. From the moment of transfer of rights and
obligations the policyholder shall acquire the right of credit claim to the share of the
redeemable sum calculated as until the day of the transfer, the obligation of payment
whereof has been retained by the insurance undertaking in bankruptcy.
5. A plan for the restoration of the assets covering insurance technical provisions
provided for Article 42(7) of this Law need not be submitted if the assets covering
insurance technical provisions that are being transferred in the implementation of the
provisions of paragraph 4 of this Article are adequate for the rights and obligations taken
over.
Article 139. Characteristics of the Transfer of Rights and Obligations under
Life Assurance Contracts of a Branch of a Non-Member-Country Insurance
Undertaking, Whose Activities are Terminated
The Supervisory Commission, having regard to the provisions of Article 138 of
this Law, shall establish the procedure for the transfer of rights and obligations under life
assurance contracts of a branch of a non-member-country insurance undertaking, whose
activities are terminated and the liabilities of which exceed the assets assigned to it.
Article 140. License of an Insurance Undertaking in Liquidation or in
Bankruptcy to Engage in Insurance Activities
1. If the license to engage in insurance activities has not been revoked before the
passing of the decision to liquidate the insurance undertaking or to institute bankruptcy
proceedings against it, the Supervisory Commission shall suspend the license after the
passing the above-mentioned decision.
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2. Having suspended the license, the insurance undertaking in bankruptcy or in
liquidated shall have the right to perform only the activities relating to insurance specified
in the Supervisory Commission's decision regarding suspension of the license.
3. Before applying to the administrator of the Register of Legal Persons for
removal of the undertaking from the Register, the liquidator of the insurance undertaking
in liquidation or the chairman of the liquidation commission, the administrator of the
bankrupt insurance undertaking must submit to the Supervisory Commission an
application for the revocation of the license to engage in insurance activities.
Article 141. Authorisation to Engage in Insurance Activities Granted to a
Branch of a Non-Member-Country Insurance Undertaking whose Activities are
Terminated
1. If the branch's authorisation to engage in insurance activities has not been
revoked before the passing of the decisions to terminate the activities of the branch of a
non-member-country insurance undertaking, the Supervisory Commission shall suspend
the validity of such authorisation.
2. Upon the suspension of the branch's authorisation to engage in insurance
activities, the branch of a non-member-country insurance undertaking shall have the right
to engage only in insurance related activities specified in the said decision of the
Supervisory Commission.
3. Before applying to the administrator of the Register of Legal Persons for the
removal of the branch of a non-member-country insurance undertaking from the Register,
the person responsible for the termination of the branch's activities must submit to the
Supervisory Commission an application for the revocation of the branch's authorisation to
engage in insurance activities.
Article 142. Rights of the Third Persons
1. Intervention measures, liquidation of an insurance undertaking, termination of
activities of a branch of a non-member-country insurance undertaking or bankruptcy of an
insurance undertaking shall not affect the rights in rem as regards the assets belonging to
the insurance undertaking or the branch of a non-member-country insurance undertaking,
situated within the territory of a European Union Member State at the moment of coming
into force of the decision to apply intervention measures, to liquidate the insurance
undertaking, to terminate the activities of the branch of a non-member-country insurance
undertaking or to institute bankruptcy proceedings against the insurance undertaking. The
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consequences of the intervention measures, liquidation, termination of activities of a
branch or bankruptcy for the rights and obligations to the regulated securities market
participants shall be established by the law applied to the securities market.
2. Intervention measures, liquidation of the insurance undertaking, termination of
activities of the branch or bankruptcy of the insurance undertaking shall not affect the
seller’s rights to the transferable, transferred assets or assets being transferred to the
purchaser - an insurance undertaking or a branch of a non-member-country insurance
undertaking - based on a reservation of title until full settlement for the assets is effected or
other contractual conditions are satisfied if at the moment of coming into force of the
decision to apply intervention measures, to liquidate the insurance undertaking, to
terminate the activities of the branch of the non-member-country insurance undertaking or
to institute bankruptcy proceedings against the insurance undertaking the assets were
situated within any other European Union Member State.
3. Intervention measures, liquidation, termination of activities of a branch or
bankruptcy shall not constitute grounds for rescinding the purchase-sale contract
concluded by the seller - an insurance undertaking or a branch of a non-member-country
insurance undertaking after the transfer of the assets to the purchaser, neither shall it affect
the transfer of the title to the assets to the purchaser if at the moment of coming into force
of the decision to apply intervention measures, to liquidate the insurance undertaking, to
terminate the activities of the branch of the non-member-country insurance undertaking or
to institute bankruptcy proceedings against the insurance undertaking the assets were
situated within any other European Union Member State.
4 Intervention measures, liquidation, termination of activities of a branch or
bankruptcy shall not affect the right of creditors to demand the set-off of their claims
where such a set-off is permitted by the law applicable to the claim of the insurance
undertaking or the branch of a non-member-country insurance undertaking.
5. Paragraphs 1-4 of this Article shall not preclude actions for voidness,
voidability or unenforceability of acts and other transactions violating legal acts, the rights
or legal interests of creditors of the insurance undertaking or branch of a non-membercountry insurance undertaking.
6. The provisions of the laws of the Republic of Lithuania in respect of voidness,
voidability or unenforceability of actions and other transactions violating legal acts, the
rights or legal interests of creditors of the insurance undertaking or branch of a nonmember-country insurance undertaking shall not apply if it is established that:
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1) these actions and other transactions are subject to the law of any other European
Union Member State;
2) the applied law does not allow any means of challenging those actions and other
transactions in the relevant case.
7. Where, after the coming into force of the decision to apply intervention
measures, to liquidate the insurance undertaking, to terminate the activities of the branch
of any other non-member-country insurance undertaking or to institute bankruptcy
proceedings against the insurance undertaking, the insurance undertaking or the branch of
any other non-member-country insurance undertaking concludes a transaction under which
it transfers the title to an immovable asset, a ship or an aircraft subject to registration in a
public register, or to transferable or other securities whose existence or transfer
presupposes under the law of the European Union Member State entry in a register,
securities account or placement in the Central Depository, the validity of that transaction
shall be governed by the law of the European Union Member State within whose territory
the immovable asset, the register, the securities account or the Central Depository is
situated.
8. The effects of the intervention measures, liquidation of an insurance
undertaking, termination of activities of the branch or bankruptcy of the insurance
undertaking on a pending lawsuit concerning the assets or the rights of the insurance
undertaking or of the branch of the non-member-country insurance undertaking shall be
governed by the law of the European Union Member State in which the lawsuit is pending.
Article 143. Requirements for the Appointed Persons
1. A person appointed liquidator of the insurance undertaking, chairman of the
liquidation commission, person responsible for termination the activities of the branch of
the non-member-country insurance undertaking or administrator of the insurance
undertaking in bankruptcy shall be of good repute, shall possess the qualification and work
experience.
2. The person appointed to any of the above-listed positions shall be entitled to
receive a copy of the Decision appointing him.
3. Persons specified in paragraph 1 of this Article acting in other European
Union Member States shall comply with the requirements of legal acts of the Member
State, in particular with regard to procedure for the realisation of assets and the informing
of the employees. If legal acts of any other European Union Member State allow for the
possibility to register intervention measures, liquidation or bankruptcy in the public
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registers of the European Union Member State, persons referred to in paragraph 1 of this
Article shall have the right to do so. If registration of the above-mentioned procedures in
the respective European Union Member State is mandatory, persons specified in paragraph
1 of this Article shall be obligated to do so. Registration costs shall be regarded as costs
and expenses incurred in the application of intervention measures, in liquidation of the
insurance undertaking, in termination the activities of the branch or in the insurance
undertaking bankruptcy proceedings.
4. Persons referred to in paragraph 1 of this Article shall be bound by the
obligation of professional secrecy being prohibited to disclose information specified in
Article 186.
5. If persons specified in paragraph 1 of this Article, whose appointment is out of
the court’s jurisdiction, are guilty of misfeasance in office, violate legal acts or interests of
the policyholders, insured, beneficiaries, injured party or other creditors, the Supervisory
Commission shall reserve the right to demand replacement of the person and to set the
deadline for the appointment of any other person.
6. If the persons specified in paragraph 1 of this Article, whose appointment is
within the court’s jurisdiction, commit misfeasance in office, violate legal acts or interests
of the policyholders, insured, beneficiaries, injured party or other creditors, the
Supervisory Commission shall reserve the right to apply to the court requesting
replacement of such person. In such case the Supervisory Commission shall nominate
candidates to the positions.
CHAPTER VIII
INSURANCE AND REINSURANCE INTERMEDIARIES
SECTION ONE
GENERAL PROVISIONS
Article 144. Application of Provisions of the Chapter
The provisions of this Chapter shall not apply to persons providing insurance
mediation services, if all of the following conditions are met:
1) the insurance contract requires only the knowledge of the insurance cover that is
provided by the person;
2) the insurance contract is not a life assurance contract;
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3) the insurance contract does not cover any liability risks;
4) the principal economic commercial activity of the person providing insurance
mediation services, which generated over 50 per cent of the person's income in the
preceding financial year, is other than insurance mediation;
5) the insurance is complementary to the product or service supplied by any
provider, where such insurance covers the risk of breakdown, loss or damage to goods
supplied by that provider; or damage to or loss of baggage and other risks linked to the
travel booked with that provider, even if the insurance covers life assurance or liability
risks, provided that the cover is ancillary to the main cover for the risks linked to that
travel;
6) the amount of the annual premium does not exceed EUR 500, and the total
duration of the insurance contract, including any possible automatic renewals (when the
duration of the contract is extended with no intention to refuse the provided insurance
cover in future is voiced by the policyholder), does not exceed five years.
SECTION TWO
INSURANCE BROKER COMPANY OF THE REPUBLIC OF LITHUANIA
Article 145. Licence for Activities of an Insurance Broker Company
1. An insurance broker company shall have the right to engage in mediation
activities only possessing a licence issued by the Supervisory Commission.
2. The licence for activities of an insurance broker company shall be issued:
1) to a public company, a private company or a European company being
established;
2) to a new public company, private company or a European company which will
operate following reorganisation, which intends to engage in the activities of insurance
brokers;
3) to a public company, private company or a European company, which is
changing the type of current business into the activity of a company of insurance brokers.
3. A licence to engage in the activities of an insurance broker company shall also
be valid in all other European Union Member States, granting the right to engage in the
activities of insurance and reinsurance mediation exercising the right of establishment
and/or the right to provide services under the conditions established in Article 173 of this
Law.
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4. A licence to engage in the activities of an insurance broker company shall be
issued for an unlimited period of time.
5. A licence to engage in the activities of a company of insurance brokers shall be
granted only to the specific insurance broker company and it cannot be transferred to any
other person.
6. Licensing rules and the form of the licence for insurance broker company shall
be approved by the Supervisory Commission.
7. An insurance broker company being established may be registered in the
Register of Legal Persons; where the licence to engage in the activities of the insurance
broker company is issued not to an insurance broker company being established,
appropriate changes may be made in the Register only upon the granting of the licence to
engage in the activities of the insurance broker company. The insurance broker company
shall notify the Supervisory Commission of the registration within 5 working days.
8. According to the regulations of the Register of Legal Persons, the Supervisory
Commission shall notify the Register of Legal Persons of the granting of the licence to
engage in the insurance broker company activities and the validity, suspension or
revocation of the licence.
9. The list of insurance broker companies shall be provided on the Internet website
of the Supervisory Commission.
Article 146. Granting of a Licence for Activities of Insurance Broker
Company
1. Within 4 months form the day of submission of the application for the granting
of a licence to engage in the activities of a company of insurance brokers and all
documents, provided for in the insurance broker company licensing rules the Supervisory
Commission shall pass a decision regarding the granting of the licence for the activities of
the company of insurance brokers and inform the applicant thereof in writing.
2. The Supervisory Commission shall refuse to grant a licence to engage in the
activities of a company of insurance brokers if:
1) documents required by the Supervisory Commission have not been submitted, or
the documents submitted do not meet the requirements of legal acts of the Republic of
Lithuania;
2) persons in control of the company of insurance brokers, participating companies,
members of the supervisory and managing bodies of the company of insurance brokers are
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not of good repute while the head of the administration is not of good repute, is not
qualified and experienced;
3) the company of insurance brokers does not possess professional liability
insurance;
4) in view of the scope of the contemplated activities (contemplated number of
customers, the turnover, internal structure, territory of the activity, future branches and
agencies) the company of insurance brokers intends to employ an insufficient number of
insurance brokers;
5) the presented scheme of operations implies that interests of the policyholders,
insured, beneficiaries and injured party are not properly protected;
6) the authorised capital is not fully paid-up;
7) the authorised capital is paid up in cash or assets, the origin of which is not
legal;
8) the company of insurance brokers is the successor to the rights and obligations
of a legal person or legal persons, exercising of which would violate provisions of Article
147(4) of this Law and/or would pose a threat to the interests of the policyholders, insured,
beneficiaries, and injured party;
9) state obligations for the granting of the licence to engage in the activities of a
company of insurance brokers have not been paid.
Article 147. Requirements for Insurance Broker Companies
1. The part of the name of an insurance broker company defining the type of the
company shall contain the words “Akcinė draudimo brokerių bendrovė”, “Uždaroji akcinė
draudimo brokerių bendrovė” or “Europos draudimo brokerių bendrovė”, or their
respective acronyms, such as “ADBB”, “UADBB” or “EDBB”. No other legal person
shall have the right to use in its name these word combinations or their acronyms or the
phrase “draudimo brokeris" or an identical phrase, except in the cases provided for by law.
2. The authorised capital of the company of insurance brokers shall not be less than
EUR 15 000, and the own capital shall be not less than 4 of the premiums income
through a financial year payable to insurers and not less than EUR 15 000. The articles of
association of a company of insurance brokers shall be amended subject to an increase or
decrease of the authorised capital. The amendments must be agreed with the Supervisory
Commission according to the procedure set by the Supervisory Commission before
submission of the information on amendments to the Register of Legal Persons. The
Supervisory Commission shall adopt the decision on amendments to the articles of
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association within 20 days after submission of all properly executed documents. Increase
of the authorised capital may be registered according to the procedure prescribed by laws
only upon full payment for shares.
3. The company of insurance brokers must insure professional liability. The sum
insured shall be not less than EUR 1 000 000 for per insured event and EUR 1 500 000 for
all insured events per year. The insurance cover must be valid throughout the entire
territory of the European Union. The company of insurance brokers must have insurance
protection throughout the period of activities.
4. A company of insurance brokers shall have no right to engage in any other
economic activities, except for the activities of insurance mediation, reinsurance mediation
and mediation in concluding pension accumulation agreements (except for supplementary
voluntary accumulation of pensions). The company of insurance brokers may also carry
out valuation of property to be covered by insurance according to the procedure
established by the Law on the Principles of Property and Business Valuation.
5. A company of insurance brokers must present statistical, financial and other
information to the Supervisory Commission in the form established by the Supervisory
Commission as well as other information which is required for the supervision of activities
of the company of insurance brokers.
Article 148. Management of Insurance Broker Companies
Persons in control of an insurance broker company, the participating undertakings,
members of supervisory and management bodies of the insurance broker company shall be
of good repute and the administration head shall be of good repute, qualified and
experienced.
Article 149. Independence of Insurance Broker Companies
1. A company of insurance brokers shall be an independent intermediary having
the right to engage in insurance mediation authorised by an insurer, policyholder, insured,
beneficiary or injured party.
2. A company of insurance brokers shall act in the interests of the policyholder,
insured, beneficiary or injured party. A company of insurance brokers shall indemnify the
policyholder, insured person, beneficiary or injured party for the losses arising from
default of this obligation according to the procedures prescribed by the Civil Code.
3. In carrying out the insurance mediation activity related to conclusion of
insurance contracts under the insurer’s authorisation, an insurance broker, having regard to
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the needs of the policyholder, shall provide the policyholder with an opportunity to choose
between analogous or similar services according to insurance cover provided by at least
two insurers.
4. A company of insurance brokers shall disclose to the policyholders, insured,
beneficiaries and injured party the nature of contractual relations with the insurers upon
whose authorisation they carry out mediation activity and provide the information
specified by the Supervisory Commission, and, prior to the conclusion of an insurance
contract, submit the information specified in Articles 78 and 99 of this Law.
5. The functions related to insurance and reinsurance mediation may only be
fulfilled by an insurance broker who is employed or holds an elective position in that
company.
6. A company of insurance brokers must open a separate bank account where the
funds of only the policyholders, insured, beneficiaries and injured party as well as the
funds of the policyholders assigned for payments to the above-mentioned persons shall be
transferred. Execution of claims arising under other obligations of the company of
insurance brokers shall not be levied against the said funds and in case of bankruptcy of
the company of insurance brokers credit claims only of the policyholders, insured,
beneficiaries and injured party may be satisfied from the funds kept in the account.
Article 150. Suspension and Revocation of the Licence for Activities of a
Company of Insurance Brokers
1. On the grounds specified in Article 198(1) of this Law, the Supervisory
Commission shall have the right to suspend the licence for activities of a company of
insurance brokers.
2. The Supervisory Commission shall have the right to revoke the licence for
activities of the company of insurance brokers, if the company of insurance brokers:
1) no longer meets the requirements under which the licence was granted;
2) committed a gross violation of legal acts;
3) refuses the licence;
4) does not start to carry out mediation activities within 12 months after the
granting of the licence for activities of a company of insurance brokers;
5) is not engaged in its activities for more than 6 months.
3. The decision to revoke the licence for activities of the company of insurance
brokers shall be fully justified. The Supervisory Commission must inform the company of
insurance brokers about the decision and its grounds in writing.
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SECTION THREE
INSURANCE BROKERS AND THE CHAMBER OF INSURANCE BROKERS
Article 151. Insurance Broker
1. Only a natural person of good repute who has passed the qualifying examination
of an insurance broker, has been entered in the list of insurance brokers administered by
the Supervisory Commission and has become a member of the Chamber of Insurance
Brokers may be an insurance broker.
2. The qualifying examination of insurance brokers shall be held and its procedure
shall be determined by the Supervisory Commission.
3. The qualifying examination shall be organised not less than once in four months.
4. The Supervisory Commission shall within 5 days enter the insurance broker who
has passed the qualifying examination in the list of insurance brokers and issue a document
in the established form. The data of the list of insurance brokers shall be announced
publicly on the website of the Supervisory Commission.
5. The Supervisory Commission shall have the right to remove an insurance broker
from the list of insurance brokers:
1) upon a written request of the insurance broker;
2) when the insurance broker dies;
3) if the insurance broker did not start professional activities within 12 months or
did not carry out its activities for more than 12 months;
4) if new facts become known after the entry in the list, due to which the broker
would have been refused entry in the list;
5) if conditions appear, due to which he may not be considered to be of good
repute;
6) on the recommendation of the Chamber of Insurance Brokers given with a view
to the decision made at the Court of Honour of Insurance Brokers;
7) in cases referred to in paragraph 8 of this Article.
6. The Supervisory Commission shall have the right to suspend the certificate of
the insurance broker upon the request of the Court of Honour of Insurance Brokers
provided for in Article 163(3) of this Law. During the period of suspension the insurance
broker shall have no right to fulfil at the insurance broker company any functions related
to insurance mediation.
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7. Upon the removal of the insurance broker from the list of insurance brokers, the
former insurance broker must return the document referred to in paragraph 4 of this Article
to the Supervisory Commission. This requirement shall not be applicable in the case
referred to in subparagraph 2 of paragraph 5 of this Article. The person removed from the
list shall have the right to become an insurance broker again not earlier that 3 years after
his removal from the list of insurance brokers.
8. The Supervisory Commission shall have the right to hold re-evaluation of
performance of an insurance broker, if complaints about the activities of the insurance
broker prove to be justified or if the evaluation data put to doubt his proper qualification. If
it is established that the insurance broker has lost his qualification or failed to attend his
performance re-evaluation without a good reason, he shall be removed from the list of
insurance brokers.
9. In a company of insurance brokers, functions related to insurance and
reinsurance mediation may be fulfilled only by a broker who is working for this company
or hold an elective position in the company.
10. An insurance broker must follow the code of professional ethics.
Article 152. Chamber of Insurance Brokers
1. The Chamber of Insurance Brokers is an association which unites all insurance
brokers and implements self-governance principles of insurance brokers.
2. The Chamber of Insurance Brokers shall have the seal with its name and the
settlement account. The Chamber of Insurance Brokers shall be liable for its obligations by
way of all its property but shall not be liable for the obligations assumed by its members,
whereas the members of the Chamber of Insurance Brokers shall not be liable for the
obligations of the Chamber of Insurance Brokers.
3. In its activities the Chamber of Insurance Brokers shall abide by this Law and
other legal acts as well as its statute.
Article 153. Founding and Registration of the Chamber of Insurance Brokers
1. The Chamber of Insurance Brokers shall be founded at the general statutory
meeting of members of the Chamber of Insurance Brokers.
2. At the statutory meeting the statute of the Chamber of Insurance Brokers shall be
approved. If the statute is not approved at the statutory meeting, a repeat meeting shall be
called within 30 days.
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3. The Chamber of Insurance Brokers shall be deemed founded upon the
registration thereof in the Register of Legal Persons.
Article 154. The Statute of the Chamber of Insurance Brokers
1. The Statute of the Chamber of Insurance Brokers shall specify:
1) name of the Chamber of Insurance Brokers, legal form, symbols and head
office;
2) objectives, functions and tasks of activity;
3) conditions and procedures of entry, withdrawal and exclusion from membership
in the Chamber of Insurance Brokers;
4) rights and obligations of the Chamber of Insurance Brokers;
5) procedures for setting-up and winding-up of subdivisions, relations between
subdivisions and the management bodies of the Chamber of Insurance Brokers as well as
the rights of subdivisions;
6) the procedure for setting up the bodies of the Chamber of Insurance Brokers,
their competence, functions and responsibility, the procedure for calling the general
meeting, recalling the elected management bodies and their members;
7) sources of assets and funding and control of financial activity;
8) procedure for granting financial and other support;
9) procedure for amending the Statute;
10) procedure for reorganising and liquidating the Chamber of Insurance Brokers.
2. The Statute may also contain other provisions relating to the activity of the
Chamber of Insurance Brokers, unless they are in conflict with this Law and other laws.
Article 155. Members of the Chamber of Insurance Brokers
1. Only persons who have passed the qualifying examination of insurance brokers,
have been entered in the list of insurance brokers administered by the Supervisory
Commission and possess a corresponding certificate, have taken the oath of the insurance
broker and put personal signature thereto shall be entitled to membership in the Chamber
of Insurance Brokers. The Chamber of Insurance Brokers shall be prohibited from refusing
membership to a person meeting all the above requirements.
2. Members of the Chamber of Insurance Brokers shall have the right to:
1) take part in the activities of the Chamber of Insurance Brokers and nominate
representatives to the management bodies of the Chamber;
2) make use of services provided by the Chamber of Insurance Brokers;
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3) make use of the information accumulated by the Chamber of Insurance Brokers;
4) receive information on the activities of the Chamber of Insurance Brokers;
5) contest decisions of the bodies of the Chamber of Insurance Brokers in the court.
Article 156. Exclusion of an Insurance Broker from the Chamber of Insurance
Brokers
1. An insurance broker who has removed from the list of insurance brokers, must
be excluded from membership of the Chamber of Insurance Brokers according to
procedure prescribed by the General Members Meeting of the Chamber of Insurance
Brokers.
2. The Chamber of Insurance Brokers shall be prohibited from removing from
membership of the Chamber of Insurance Brokers an insurance broker who has not yet
been removed from the list of insurance brokers.
Article 157. Functions of the Chamber of Insurance Brokers
The Chamber of Insurance Brokers shall exercise the following functions:
1) taking into account the recommendations of the Supervisory Commission,
prepare and approve the code of professional ethics of insurance brokers and control
compliance with it;
2) draw up the amendments to the Statute of the Chamber of Insurance Brokers;
3) draw up the statute for the court of honour of Insurance Brokers;
4) organise and co-ordinate internship and in-service training for insurance brokers;
5) present proposals to the Supervisory Commission concerning qualifying
examinations and re-evaluation of performance organised by the Commission;
6) set the number of hours of compulsory annual in-service training of insurance
brokers;
7) handle the issues of improvement of the professional activity of insurance
brokers;
8) consider complaints of persons about the activities of insurance brokers and
violations of professional ethics;
9) taking into account the decision by the court of honour of insurance brokers,
present proposals to the Supervisory Commission to suspend the certificate of the
insurance broker for an up to 1 year period or remove the insurance broker from the list of
insurance brokers;
10) fulfil other functions laid down in the statute.
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Article 158. Management of the Chamber of Insurance Brokers
The management bodies of the Chamber of Insurance Brokers shall be the general
members meeting of the Chamber of Insurance Brokers, the presidium and the
administration. Presidium and administration shall be the management bodies of the
Chamber of Insurance Brokers.
Article 159. General Members Meeting of the Chamber of Insurance Brokers
1. To discuss and expand the activity, insurance brokers shall meet in the General
Members Meeting of the Chamber of Insurance Brokers every year.
2. The General Members Meeting of the Chamber of Insurance Brokers shall be
called and organised by the presidium of the Chamber.
3. The General Members Meeting of the Chamber of Insurance Brokers shall be the
supreme body of the Chamber.
4. The General Members Meeting of the Chamber of Insurance Brokers shall be
called according to the procedure set out in the Statute of the Chamber of Insurance
Brokers. An extraordinary meeting shall be called when it is required by not less than 1/5
of the members or on the decision of the presidium.
5. The General Members Meeting of the Chamber of Insurance Brokers shall have
the following rights:
1) to approve, supplement and amend the statute of the Chamber of Insurance
Brokers;
2) to set the number of members of the presidium of the Chamber of Insurance
Brokers;
3) to elect and revoke the members of the presidium of the Chamber of Insurance
Brokers;
4) to elect the president of the Chamber of Insurance Brokers;
5) to appoint the members of the court of honour of the Chamber of Insurance
Brokers;
6) to choose an auditing company for auditing the financial accounts of the
Chamber of Insurance Brokers;
7) to set the fee for membership in the Chamber of Insurance Brokers;
8) to approve the statutes of the court of honour of the insurance brokers;
9) to approve the code of professional ethics of insurance brokers;
10) to approve the use of funds of the Chamber of Insurance Brokers;
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11) to set the number of staff members of the Chamber of Insurance Brokers and
their wages;
12) to handle other issues specified in the Statute of the Chamber of Insurance
Brokers.
6. The general members meeting of the Chamber of Insurance Brokers shall be
legal when it is attended by at least one half of the members. Decisions shall usually be
made by simple majority vote, unless otherwise provided by laws.
7. Where the general members meeting of the Chamber of Insurance Brokers does
not have a quorum, a repeat meeting shall be held according to the procedure set out in the
Statute not later than after 30 days. It shall have the right to make decisions on the issues
on the agenda of the meeting that has not been regardless of the number of attending
members.
Article 160. Presidium and Administration of the Chamber of Insurance
Brokers
1. The activity of the Chamber of Insurance Brokers between the general members
meeting of the Chamber of Insurance Brokers shall be managed by the presidium; it shall
be elected according to procedure laid down in the Statute of the Chamber of Insurance
Brokers.
2. The meeting of the presidium of the Chamber of Insurance Brokers shall be legal
when attended by at least one half of its members, and its decisions shall be legal when
they are voted in favour of by not less than one half of the attending members. All
members shall have equal voting rights. In the event of a tie vote the vote of the president
of the Chamber of Insurance Brokers shall have the casting vote.
3. The activity of the Chamber of Insurance Brokers shall be organised and carried
out by the administration.
4. The administration shall be headed by the director. The director and the chief
accountant shall be appointed by the presidium of the Chamber of Insurance Brokers. The
obligations of the chief accountant may also be performed by the companies engaged in
accounting services.
Article 161. Grounds for Bringing a Disciplinary Action against an Insurance
Broker
1. On the proposal of the presidium of the Chamber of Insurance Brokers or the
Supervisory Commission, a disciplinary action may be taken against an insurance broker
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for the violation of this Law, other legislation, professional activities or Code of
Professional Ethics of Insurance Brokers.
2. Within 30 days from the day of receipt of the proposal of the presidium of the
Chamber of Insurance Brokers or the Supervisory Commission to take disciplinary action
against an insurance broker, the Court of Honour of Insurance Brokers shall take a
decision to take or not to take disciplinary action against the broker.
Article 162. The Court of Honour of Insurance Brokers
1. The Court of Honour of Insurance Brokers shall be formed according to the
following procedure:
1) three members - insurance brokers having at least three years of experience in
insurance mediation activity shall be appointed by the general members meeting of the
Chamber of Insurance Brokers;
2) the Supervisory Commission and the National Council for the Protection of
Consumer Rights shall each appoint a member.
2. The term of office of the Court of Honour of Insurance Brokers shall be 3 years.
The members of the Court of Honour of Insurance Brokers may be appointed for not more
than two terms in succession.
3. The Court of Honour of Insurance Brokers shall hear cases if the hearing is
attended by not less than 3 members, provided that at least one of them has been appointed
not by the members meeting of the Chamber of Insurance Brokers.
4. The Court of Honour of Insurance Brokers shall make a decision within 60 days
from the day of the decision to bring a disciplinary action.
5. The general members meeting of the Chamber of Insurance Brokers shall work
according to the provisions approved by the General Members Meeting of the Chamber of
Insurance Brokers.
Article 163. Disciplinary Penalties and other Decisions Made by the Court of
Honour of Insurance Brokers
1. For the violations specified in Article 161(1) of this Law the Court of Honour of
Insurance Brokers may impose one of the penalties listed bellow:
1) a warning;
2) a reprimand;
3) a publicly announced reprimand.
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2. One violation shall be subject to only one disciplinary penalty. One year after the
imposition of a disciplinary penalty the insurance broker shall be considered not having
been imposed a disciplinary penalty.
3. Where an insurance broker with a disciplinary penalty imposed on him still
effective repeatedly commits violations specified in Article 161(1) of this Law, the Court
of Honour of Insurance Brokers may make one of the following decisions:
1) apply to the Supervisory Commission for suspension of the broker’ certificate
for up to one year;
2) apply to the Supervisory Commission for removal of the broker from the list of
insurance brokers.
4. The Court of Honour of Insurance Brokers, upon making a decision to impose
penalties listed in paragraph 1 of this Article or a decision specified in paragraph 3 of this
Article, shall submit the decision to the Chamber of Insurance Brokers within 14 days after
the date when appropriate decision was made. The insurance broker shall be informed in
writing of the decision made within 3 days of the date when the decision was made.
5. During the hearing of the case at the Court of Honour of Insurance Brokers, the
insurance broker may proceed with his obligations.
Article 164. Appeal of Decisions Made by the Court of Honour of Insurance
Brokers
Decisions made by the Court of Honour of Insurance Brokers may be appealed
within 1 month of the date of service of the appropriate decision according to the
procedure set out in legal acts.
Article 165. Sources of Funds of the Chamber of Insurance Brokers
The sources of funds of the Chamber of Insurance Brokers shall be:
1) the membership fee fixed in the Statute of the Chamber of Insurance Brokers
and other targeted payments fees;
2) income from the training services provided;
3) funds and property transferred gratuitously by natural and legal persons;
4) state or municipal target-oriented funds;
5) funds granted by non-public organisations, international organisations,
foundations;
6) interest for the funds kept in credit institutions;
7) the property inherited by will;
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8) borrowed funds;
9) other legally obtained funds.
Article 166. Control of the Financial Activity of the Chamber of Insurance
Brokers
The financial accounts of the Chamber of Insurance Brokers shall be audited by the
auditing company chosen at the general members meeting of the Chamber of Insurance
Brokers.
Article 167. Reorganisation and Liquidation of the Chamber of Insurance
Brokers
The Chamber of Insurance Brokers may be reorganised and liquidated according to
procedure established by laws.
SECTION FOUR
DEPENDENT INSURANCE INTERMEDIARIES OF THE REPUBLIC OF
LITHUANIA
Article 168. List of Dependent Insurance Intermediaries
1. Every insurance undertaking or a branch of a non-member-country insurance
undertaking must administer a list of dependent insurance intermediaries acting in its name
and/or in its interests in the manner established by the Supervisory Commission. The list
shall also contain data on the employees of the company of insurance agents whose
obligations include insurance mediation.
2. An insurance undertaking or a branch of a non-member-country insurance
undertaking shall have the right to enter a company of insurance agents into the list of
dependent insurance intermediaries only having verified the repute and qualification of
persons working for this company of insurance agents whose obligations shall cover
insurance mediation and in case of an insurance agent – only upon checking reputation and
qualification. These persons should be of good repute and qualified.
3. An insurance undertaking or a branch of a non-member-country insurance
undertaking, having entered a dependent insurance intermediary in the list, must issue the
dependent insurance intermediary with a special document confirming this fact.
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Article 169. Professional Liability Insurance of Dependent Insurance
Intermediaries
1. Dependent insurance intermediaries must insure professional liability which
might arise in case of improper insurance mediation. The sum insured shall be not less
than EUR 1 000 000 per insured event and EUR 1 500 000 for all insured events per year.
The insurance cover must be valid throughout the entire territory of the European Union.
The dependent insurance intermediary must have insurance protection throughout the
period of mediation activities.
2. A dependent insurance intermediary shall have the right not to insure
professional liability if the insurance undertaking or a branch of a non-member-country
insurance undertaking has concluded a professional liability insurance contract of a
dependent insurance intermediary for the amount referred to in paragraph 1 of this Article,
and this insurance contract is valid throughout the territory of the European Union for the
entire period of activity of the dependent insurance intermediary on behalf and in the
interests of the insurance undertaking or a branch of a non-member-country insurance
undertaking.
3. An insurance undertaking or a branch of a non-member-country insurance
undertaking must ensure that the dependent insurance intermediaries acting on their behalf
and/or for their interests follow the requirements set forth in paragraphs 1 and 2 of this
Article. In case of failure by the insurance undertaking or a branch of a non-membercountry insurance undertaking to fulfil the above duty, it must fully indemnify the loss
incurred due to the failure by the dependent insurance intermediary to fulfil professional
obligations or improper fulfilment thereof.
4. Insurance undertakings or branches of non-member-country insurance
undertakings must organise professional training sessions for the staff of companies of
insurance agents whose activities include insurance mediation as well as for insurance
agents.
Article
170. Insurance
Mediation
Activity of
Dependent Insurance
Intermediaries
1. Rights and obligations of dependent insurance intermediaries in conducting
insurance mediation activities shall be established in a written agreement with the
insurance undertaking or a branch of a non-member-country insurance undertaking.
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2. A dependent insurance intermediary shall be prohibited from concurrently
carrying out insurance mediation activities on behalf and in the interests of two or more
insurers relating to contracts providing identical or similar insurance coverage.
3. A dependent insurance intermediary must provide to the policyholders, insured,
beneficiaries and injured party the information specified by the Supervisory Commission
and, prior to the conclusion of the contract, also the information specified in Articles 78
and 99 of this Law.
4. Insurance premium paid to a dependent insurance intermediary shall be
considered as paid to the insurance undertaking or a branch of a non-member-country
insurance undertaking; however, the amounts paid by the insurance undertaking or a
branch of a non-member-country insurance undertaking to the dependent insurance
intermediary and intended for making payment to the policyholders, insured, beneficiaries
or injured party shall be deemed paid to those persons only upon their actual receipt of the
said amounts.
5. An insurance undertaking or a branch of a non-member-country insurance
undertaking, having regard to the resolutions and recommendations of the Supervisory
Commission, must provide mandatory instructions on the mediation activity to the
dependent insurance intermediaries acting on its behalf and in its interests.
Article 171. Mediation of Dependent Insurance Intermediaries for Insurance
Undertakings of any other European Union Member State Engaged in Activities in
the Republic of Lithuania
1. A dependent insurance intermediary mediating for an insurance undertaking of
any other European Union Member State which provides services or has established a
branch in the Republic of Lithuania, shall be subject to the same requirements as those
applied in case of mediation for an insurance undertaking or a branch of a non-membercountry insurance undertaking.
2. The Supervisory Commission shall give recommendations to an insurance
undertaking of any other European Union Member State, which provides services or has
established a branch in the Republic of Lithuania, regarding administration of the list of
dependent insurance intermediaries, control of professional liability insurance and
professional training of the employees of companies of insurance agents whose cover
insurance mediation activities.
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Article 172. Availability of Data of the List of Dependent Insurance
Intermediaries
1. Every insurance undertaking or a branch of a non-member-country insurance
undertaking must publish on its website the data of the list of its representing insurance
agents, undertakings of insurance agents and their staff, whose obligations cover insurance
mediation.
2. The website of the Supervisory Commission shall contain references to the data
of the list published on the website of insurance undertakings, whereas the data of the list
published on the insurance undertakings' websites shall contain references to the website
of the Supervisory Commission.
3. Should there be any amendments in the list data, appropriate amendments must
be within 5 working days made in the data of the list published on the websites of the
insurance undertakings or branches of non-member-country insurance undertakings.
4. The Supervisory Commission shall specify what data of the list should be made
publicly available.
SECTION FIVE
ACTIVITY OF INSURANCE INTERMEDIARIES IN OTHER EUROPEAN
UNION MEMBER STATES
Article 173. Right to Provide Services and Right of Establishment
1. A company of insurance brokers or a company of insurance agents, which
intends to provide services for the first time or establish a branch in other European Union
Member States must notify the Supervisory Commission.
2. Within one month after receiving this information, the Supervisory Commission
shall notify thereof the competent authority of the European Union Member State, which
intends to obtain this information on the basis of the data submitted to the Supervisory
Commission by the Commission of the European Communities, at the same time
informing the insurance intermediary in writing about the sending on the same day.
3. Having fulfilled the requirements laid down in the legal acts of any other
European Union Member State, the insurance intermediary shall have the right to start
operating in any other European Union Member State in the ways specified in paragraph 1
of this Article after the lapse of one month from the receipt from the Supervisory
Commission of the information specified in paragraph 2 of this Article or immediately, if
the competent authority of any other European Union Member State has no intentions to
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obtain information about future activities of insurance or reinsurance intermediary in this
European Union Member State.
4. The Supervisory Commission shall exchange information with competent
authorities of other European Union Member States about sanctions applied to insurance
intermediaries. Upon request of competent authorities of other European Union Member
States, the Supervisory Commission shall also furnish other information concerning
activities of insurance and reinsurance intermediaries.
5. An insurance intermediary shall have the right to establish a subsidiary in any
other European Union Member State according to the procedure laid down in the legal acts
of that Member State.
SECTION SIX
ACTIVITY OF INSURANCE AND REINSURANCE INTERMEDIARIES OF
OTHER EUROPEAN UNION MEMBER STATES IN THE REPUBLIC OF
LITHUANIA
Article 174. Forms of Activities of Insurance and Reinsurance Intermediaries
Insurance and reinsurance intermediaries of other European Union Member States
shall have the right to establish a subsidiary or a branch or to provide services in the
Republic of Lithuania.
Article 175. Commencement of Activities of Insurance and Reinsurance
Intermediaries
1. Insurance intermediaries of other European Union Member States shall have the
right to start to provide services or establish a branch in the Republic of Lithuania only
upon the receipt by the Supervisory Commission of information from the competent
authority of any other European Union Member State about the intention to start providing
services or to establish a branch.
2. Independent insurance and reinsurance intermediaries of other European Union
Member States, while carrying out activities in the Republic of Lithuania, must posses the
professional liability insurance established in Article 147(3) of this Law,, whereas the
dependent insurance and reinsurance intermediaries must possess the professional liability
insurance prescribed by Article 169(1) or some other comparable guarantee against
liability arising from their activity which is analogous to that established in Article 169(2)
of this Law.
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Article 176. Activity of Insurance and Reinsurance Intermediaries
1. Insurance intermediaries of other European Union Member States must provide
information specified by the Supervisory Commission to the policyholders, insured,
beneficiaries, and injured party and before the conclusion of insurance contract also
furnish the information indicated in Article 78 and 99 of this Law.
2. Insurance and reinsurance intermediaries of other European Union Member
States, while carrying out activities in the Republic of Lithuania, must comply with the
provisions set out in this Law directly for them as well as other legal acts of the Republic
of Lithuania.
3. A branch of independent insurance intermediary of any other European Union
Member State must have on its staff insurance brokers or other persons, who, according to
the requirements of legal acts of this European Union Member State, may be responsible
for providing services of independent insurance mediation.
4. The Supervisory Commission shall draw up compulsory instructions for
insurance undertakings, branches of non-member-country insurance undertakings and
recommendations for an insurance undertaking of any other European Union Member
State, which provides services or has established a branch in the Republic of Lithuania,
regarding administration of the list of dependent intermediaries of another European Union
Member State, control of their professional liability insurance and professional training of
the employees of these dependent insurance intermediaries the obligations of which cover
insurance mediation activities.
SECTION SEVEN
ACTIVITIES OF NON-MEMBER COUNTRY INDEPENDENT INSURANCE
INTERMEDIARIES AND REINSURANCE INTERMEDIARIES IN THE
REPUBLIC OF LITHUANIA
Article 177. Subsidiary and Branch of Independent Insurance Intermediaries
1. Non-member-country independent insurance intermediaries shall have the right
to establish a subsidiary or a branch in the Republic of Lithuania.
2. Before registering the branch in the Register of Legal Persons, the non-membercountry independent insurance intermediaries must be granted an authorisation by the
Supervisory Commission to engage in the activities of a branch.
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3. The procedure for granting the authorisation to engage in the activities of a
branch shall be established by the Supervisory Commission.
4. The activity of branches of non-member-country independent insurance
intermediaries and of insurance brokers employed in the branches shall be subject to the
same provisions as those applied to insurance broker companies and to insurance brokers
of the Republic of Lithuania.
Article 178. Granting of an Authorisation to Engage in the Activity of a
Branch
1. Within 4 months from the date of filing of an application for the granting of an
authorisation to engage in the activity of a branch of a non-member-country independent
insurance intermediary as well as submission of all documents specified in the instructions
on the granting of authorisations, the Supervisory Commission shall make a decision
regarding the granting of the authorisation to the branch of the non-member-country
independent insurance intermediary and shall notify the applicant thereof in writing.
2. The Supervisory Commission shall refuse to grant the authorisation to engage in
the activity of a branch of an undertaking of a non-member-country independent insurance
intermediary in the case where:
1) the documents required by the Supervisory Commission have not been
submitted or the submitted documents do not meet the requirements laid down in the legal
acts of the Republic of Lithuania;
2) the persons in control of a branch of the non-member-country independent
insurance intermediary, the members of supervisory and management bodies of
participating undertakings are not of good repute, and the head of administration is not of
good repute, does not have adequate professional qualifications or experience.
3) a branch of the non-member-country independent insurance intermediary has no
professional liability insurance;
4) having regard to the scope of intended activities (number of customers, turnover,
internal structure of the undertaking, territory of the activity, intended branches, agencies),
a branch of the non-member-country independent insurance intermediary is planning to
employ an insufficient number of insurance brokers;
5) the submitted scheme of operations allows to maintain that the interests of
policyholders, insured persons, beneficiaries and injured party will not be adequately
protected;
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6) the value of assets attributed to the branch is below than the amount specified in
Article 147(2) of this Law;
7) the origin of the assets attributed to the branch and/or the financial resources for
which the attributes assets were acquired is illegal.
Article 179. Suspension and Revocation of the Authorisation for Activity of a
Branch
1. The Supervisory Commission shall have the right to suspend the authorisation
for the activity of a branch of a non-member-country independent insurance intermediary
the grounds specified in Article 198(1) of this Law.
2. The Supervisory Commission shall have the right to revoke the permit for
activity of a branch of the non-member-country independent insurance intermediary, when
the branch:
1) does not meet the requirements under which the authorisation was granted;
2) has committed a gross violation of laws;
3) has refused the authorisation;
4) does not engage in the activity of insurance intermediary for 12 months after
granting of the authorisation for the activity of the branch of the non-member-country
independent insurance intermediary;
5) does not engage in insurance mediation activity for more than 6 months.
3. The decision to revoke the authorisation for activity of the branch of the nonmember-country independent insurance intermediary must be duly justified. The
Supervisory Commission shall notify the branch of the non-member-country independent
insurance intermediary of the decision and its reasons in writing.
Article 180. Reinsurance Intermediaries
1. Reinsurance intermediaries of non-member-countries shall have the right to
provide services in the Republic of Lithuania without establishment or to establish a
subsidiary or a branch in the Republic of Lithuania.
2. Branches of non-member-country reinsurance intermediaries shall be established
in the manner set forth by legal acts of the Republic of Lithuania.
3. Non-member-country reinsurance intermediaries, while carrying out activities in
the Republic of Lithuania, must possess professional liability insurance valid in the
Republic of Lithuania which is established Article 147(3) of this Law, whereas dependent
reinsurance intermediaries must possess the professional liability insurance prescribed by
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Article 169(1) or some other comparable guarantee against liability arising from their
activity which is analogous to that established in Article 169(2) of this Law.
CHAPTER IX
INSURANCE SUPERVISORY COMMISSION
OF THE REPUBLIC OF LITHUANIA
SECTION ONE
GENERAL PROVISIONS
Article 181. Supervisory Commission
1. Supervision of insurance activity in the Republic of Lithuania shall be carried
out by the Insurance Supervisory Commission of the Republic of Lithuania (hereinafter
and throughout the text of the Law, as stated in Article 2(36) – Supervisory Commission).
2. The Supervisory Commission is an institution financed from the state budget,
exercising state functions in the area of insurance, reinsurance, mediation of insurance and
reinsurance activities supervision, having bank accounts and a seal with the state arms of
the Republic of Lithuania and its own name. The Government of the Republic of Lithuania
shall approve the Regulations of the Supervisory Commission.
3. The purpose of the Supervisory Commission is to ensure reliability, efficiency,
safety, and stability of the insurance system and protection of interests and rights of the
policyholders, insured, beneficiaries, and injured party.
4. The Supervisory Commission shall supervise activities of insurance
undertakings, branches of non-member-country insurance undertakings established in the
Republic of Lithuania, insurance broker companies, and branches of non-member-country
independent insurance intermediaries established in the Republic of Lithuania. The
Supervisory Commission shall also supervise the activities of insurance undertakings and
insurance intermediaries which provide services or have established branches in other
European Union Member States. The Supervisory Commission shall carry out supervision
of activities of insurance, insurance or reinsurance mediation of other persons in the
Republic of Lithuania only within the scope established by this Law.
5. Information about the structure of the Supervisory Commission, the functions of
its structural divisions, contact details, interaction between the structural divisions, activity
of the structural divisions and their control shall be published on the Internet website of the
Supervisory Commission.
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6. The Supervisory Commission shall be liquidated according to procedure
prescribed by laws.
Article 182. Composition and Procedure of Setting-up of the Supervisory
Commission
1. The Supervisory Commission shall consist of the following five members:
chairman of the Supervisory Commission, his deputy, and other three members.
2. Only qualified and experienced citizens of the Republic of Lithuania with good
repute may be members of the Supervisory Commission.
3. The chairman of the Supervisory Commission shall be elected for a five-year
term of office and recalled before the expiry of term of office by the Prime Minister on the
recommendation of the Minister of Finance, and the deputy chairman as well as other
members - on the proposal of the chairman.
4. Members of the Supervisory Commission shall be responsible for the sphere of
activity assigned to them by the chairman of the Supervisory Commission. Members of the
Supervisory Commission may stay in the office no longer than two terms in a row.
5. Members of the Supervisory Commission shall be given incentives, have their
responsibility defined, be provided social and other guarantees according to procedures
prescribed by laws and other legal acts. Members of the Supervisory Commission shall be
remunerated according to the procedure prescribed by the Law on Wages of State
Politicians, Judges and State Officials of the Republic of Lithuania.
6. Each member of the Commission must, without any special authorisations,
provide information to the public regarding the implementation of objectives and functions
of the Supervisory Commission as well as the state of the insurance system.
7. A member of the Supervisory Commission may be dismissed before the end of
the term only in the following cases:
1) upon his resignation;
2) if he has been absent from work due to temporary disability for more than 120
days in a row, or for more than 140 days within the last twelve-month period, or upon
receipt of the finding of a medical examination or disability establishment commission
stating that he can no longer fulfil his obligations;
3) upon the coming into effect of the court judgement imposing a sentence that
precludes him from further exercising his work functions;
4) if the person no longer meets the requirements needed to carry out these
obligations;
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5) if the person has been found guilty of gross misconduct in office.
8. Upon dismissal of a member of the Commission, another person shall be
appointed in his stead for a new term.
9. Members of the Supervisory Commission may occupy a position only in the
Supervisory Commission, except for scientific, creative or pedagogical work. Members of
the Supervisory Commission shall not be members of supervisory or managing bodies of
an insurance undertaking or of insurance intermediaries.
10. Members of the Supervisory Commission shall not be members of supervisory
boards or boards of insurance undertakings or of insurance intermediaries or heads of
administration of the above undertakings or non-member-country insurance undertakings
or branches of independent insurance intermediaries in the Republic of Lithuania before
the lapse of one year after the expiry of their term of office, their dismissal or resignation.
11. Upon the expiry of his term of office a member of the Supervisory Commission
shall continue in office until the appointment of the member who is to succeed him.
Article 183. Meetings of the Supervisory Commission
1. Meetings of the Supervisory Commission shall be held as necessary, but no less
than once per month.
2. Meetings of the Supervisory Commission shall be legal when no less than three
members of the Supervisory Commission, including the chairman or the deputy chairman,
are participating. Decisions of the Supervisory Commission shall be passed by simple
majority vote. A member of the Supervisory Commission shall have no right to refuse to
vote or to abstain. In the event of a tie, the meeting's chairman shall have the casting vote.
3. Issues for the agenda of the meetings of the Supervisory Commission shall be
proposed by members of the Supervisory Commission.
4. Meetings of the Supervisory Commission shall be chaired by the chairman of the
Supervisory Commission or , in his absence, his deputy.
5. Minutes shall be taken of the meeting of the Supervisory Commission. All
members of the Supervisory Commission who participated in the meeting shall sign the
minutes of the meeting. If a member of the Supervisory Commission does not agree with
the decision and votes against it, his separate opinion shall be recorded in the minutes, and
he shall not be considered responsible for the decision of the Supervisory Commission.
Members of Supervisory Commission shall be prohibited from making public the opinions
expressed during the meeting.
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6. A decision of the Supervisory Commission shall be executed with the resolution
which is signed by the chairman of the Supervisory Commission, or in his absence, by
deputy chairman of the Management Board.
7. If a question, which is considered at the meeting of the Supervisory
Commission, is related to private interests of a member of the Commission, giving rise to a
conflict of public and private interests, the member of the Supervisory Commission shall
notify thereof in writing before the consideration of the issue and shall have no right to
participate in the consideration and adoption of the decision.
Article 184. Chairman of the Supervisory Commission
1. The chairman of the Supervisory Commission shall:
1) organise the work of the Supervisory Commission;
2) represent the Supervisory Commission in the Republic of Lithuania and abroad;
3) head the administration of the Supervisory Commission;
4) call meetings of the Supervisory Commission;
5) exercise other functions assigned by the Supervisory Commission.
2. The chairman of the Supervisory Commission shall issue orders within the remit
of his competence.
Article 185. Administration of the Supervisory Commission
1. The administration of the Supervisory Commission shall be set up to exercise the
functions of the Supervisory Commission. The administration of the Supervisory
Commission shall not be a legal entity. The structure and staffing of the administration of
the Supervisory Commission shall be approved by the Supervisory Commission. The
functions of the Supervisory Commission shall be approved by this Law and the work
regulation approved by the Supervisory Commission.
2. The Supervisory Commission shall have the right to charge the administration of
the Supervisory Commission to fulfil the functions specified in paragraphs 4, 6, 8, 11
through 15 of Article 192 of this Law, and to exercise of the rights specified in
subparagraphs 1 through 3 and 8 of paragraph 1 of Article 193 of this Law.
3. The administration of the Supervisory Commission shall fulfil the functions
prescribed by this Law by executing the resolutions of the Supervisory Commission and
orders of the chairman in compliance with the work regulation of the Supervisory
Commission.
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4. The administration of the Supervisory Commission shall consist of public
servants who are subject to the Law on Public Service and of employees who, according to
the procedure prescribed by laws, are employed under employment contracts.
5. The Supervisory Commission shall furnish information about the public servants
and employees of the administration only in the cases and the manner established by law.
Article 186. Keeping the Secrets of the Supervisory Commission Confidential
and Furnishing of the Information Related to Supervision of the Entities Specified in
this Law
1. The detailed list of information which constitutes an official secret of the
Supervisory Commission shall be approved and amended by the chairman of the
Supervisory Commission according to the Law on State Secrets and Official Secrets.
2. Members of the Supervisory Commission, former members of the Supervisory
Commission, public servants of the administration of the Supervisory Commission, former
public servants of the administration and the staff, state institutions, and all other legal and
natural persons, who have received information from the Supervisory Commission which
is related to supervision of the entities specified in this Law, must keep it confidential and
not disclose it, except for the cases provided for in paragraphs 3 and 4 of this Article. The
Supervisory Commission shall establish the list of information which is related to
supervision of the entities specified in this Law. The list shall be announced publicly.
3. The information related to supervision of the subjects specified in this Law, shall
be furnished and disclosed only in the manner specified by this Law and other laws.
4. The furnishing of information related to the supervision of the entities specified
in this Law in a generalised form precluding identification of the specific persons shall not
treated as disclosure.
5. The Supervisory Commission shall have the right to furnish information related
to supervision of the entities specified in this Law, which is necessary for the execution of
functions of recipients of such information, to:
1) competent authorities of any other European Union Member State;
2) the Securities Commission of the Republic of Lithuania, the Central Bank of
Lithuania, the Competition Council, and the National Council for Consumer Protection;
3) institutions of any other European Union Member State which carry out
supervision of financial and capital market;
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4) institutions of any other European Union Member State which are responsible
for the supervision of persons who participate in liquidation or bankruptcy and other
similar procedures of companies providing financial services;
5) institutions of any other European Union Member State which are responsible
for supervision of persons who were authorised to conduct the audit of insurance
undertakings, credit institutions, investment companies and other financial institutions
specified by the law;
6) independent actuaries of any other European Union Member State who carry out
legal supervision of these companies and to institutions which are responsible for
supervision of such actuaries;
7) institutions of any other European Union Member State which are empowered
under law to detect and investigate breaches of the company law;
8) central banks of any other European Union Member State and other monetary
institutions that exercise similar functions;
9) authorities of any other European Union Member State which are responsible for
supervision of payment systems;
10) institutions or persons who are responsible for liquidation or bankruptcy of
insurance undertakings, insurance intermediaries, participants of financial and capital
market – legal persons;
11) auditors of insurance undertakings, branches of non-member-country insurance
undertakings, insurance intermediaries, branches of non-member-country reinsurance
intermediaries established in the Republic of Lithuania, participants of financial and
capital market – auditors of legal persons;
12) law enforcement institutions of the Republic of Lithuania and other persons,
entitled to receive such information under the legislation of the Republic of Lithuania.
6. The Supervisory Commission shall have the right to conclude agreements on the
exchange of information necessary for fulfilling supervisory functions with competent
authorities of non-member-countries states, institutions exercising supervision of financial
and capital market, provided that the laws of these states guarantee the same level of safety
of the obtained information as this Law.
7. The Supervisory Commission shall have the right to disclose, in the manner
established by confidential information which is necessary for the Supervisory
Commission for exercising its functions and which was obtained from competent
authorities of any other European Union Member State and non-member-country, the
Securities Commission of the Republic of Lithuania, the Central Bank of Lithuania, the
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Competition Council, and the National Council for Consumer Protection, institutions
exercising supervision of the financial and capital market of any other European Union
Member State as well as other institutions, only upon receiving the consent of these
persons and only for the purpose specified in the consent.
8. Information, obtained by the Supervisory Commission during the inspection of a
branch of an insurance undertaking or a company of insurance intermediaries established
in any other European Union Member State, may be disclosed in the manner established
by law only with the consent of the competent authority of any other European Union
Member State.
Article 187. Financing of the Supervisory Commission
1. The Supervisory Commission shall be financed from deductions from the written
insurance premiums (received or receivable insurance premiums, accounted according to
procedure prescribed by laws) from insurance undertakings and branches of non-membercountry insurance undertakings in the Republic of Lithuania, except for the premiums of
any compulsory insurance of any category, also from the state budget according to the
procedure prescribed by legal acts.
2. The amounts of deductions from written insurance premiums shall be set by the
Government of the Republic of Lithuania.
3. Insurance undertakings and branches of non-member-country insurance
undertakings in the Republic of Lithuania must submit reports to the Supervisory
Commission and transfer the deducted amounts to the account of the Supervisory
Commission no later than by the 30th day of the first month of the following quarter.
4. Insurance undertakings and branches of non-member-country insurance
undertakings shall transfer default interest to the account of the Supervisory Commission
for the missed term: 0.05 % from the unpaid amount per day. A prescription period of 5
years shall be applied to claims of the Supervisory Commission regarding recovery of
default interest. The payment of default interest shall not release from the duty to pay the
overdue amount.
Article 188. Financial Statements of the Supervisory Commission
1. The Supervisory Commission shall submit its annual financial statements to the
Government of the Republic of Lithuania and publish the statements within four months
after the end of a financial year.
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2. The financial and operational audit of the Supervisory Commission shall be
conducted by the State Control of the Republic of Lithuania.
Article 189. Annual Report of the Supervisory Commission
The Supervisory Commission shall publicly announce the annual report and issue it
as a separate publication where it presents information about the condition of the insurance
market and fulfilment of functions of the Supervisory Commission. The annual report shall
also contain the annual financial statements of the Supervisory Commission.
Article 190. Statistical Data
The Supervisory Commission shall, on a regular basis, publish statistical data on
the insurance and insurance mediation market in the manner established by the
Supervisory Commission.
Article 191. Report of the Chairman of the Supervisory Commission to the
Government of the Republic of Lithuania
The chairman of the Supervisory Commission shall twice per year submit a report
to the Government of the Republic of Lithuania concerning the realisation of the major
objective, fulfilment of functions, and the condition of the insurance system.
SECTION TWO
COMPETENCE OF THE SUPERVISORY COMMISSION
Article 192. Functions of the Supervisory Commission
The Supervisory Commission, while implementing the provisions of this Law,
shall perform the following functions:
1) draft, approve, amend, and repeal legal acts regulating activities of insurance
undertakings, insurance intermediaries, branches of non-member-country insurance
undertakings and branches of companies of independent insurance intermediaries
established in the Republic of Lithuania, including financial and statistical accounts;
2) grant and revoke licences to engage in insurance and insurance mediation
activity;
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3) grant and revoke other authorisations established by this Law as well as
authorisations prescribed by other laws, the granting and revocation of which is assigned
the competence of the Supervisory Commission;
4) observe, analyse, check and supervise in other ways activities of insurance
undertakings, insurance broker companies, branches of non-member-country insurance
undertakings and branches of independent insurance intermediaries established in the
Republic of Lithuania, their compliance with laws and other legal acts;
5) apply sanctions provided for in this Law and other laws;
6) organise qualification examinations and performance re-evaluation of insurance
brokers;
7) lay down the procedure for the registration and record-keeping of insurance
policies;
8) co-operate with competent authorities, financial and capital market supervisory
institutions, competition and consumer rights’ protection institutions of the Republic of
Lithuania, other European Union Member States and non-member states as well as with
other institutions of the Republic of Lithuania;
9) apply to the court for the institution of bankruptcy proceedings against insolvent
insurance undertakings;
10) approve the estimate of expenditure of the Supervisory Commission upon
agreement of the estimate with the Government of the Republic of Lithuania;
11) inform the public about fulfilment of the functions of the Supervisory
Commission, significant changes in the insurance system;
12) publish drafts of the Supervisory Commission regulations on the Internet
website of the Supervisory Commission;
13) ensure that the public has access to the information, except for the information
which constitutes official secret of the Supervisory Commission, about co-operation of the
Supervisory Commission with competent authorities, financial and capital market
supervision institutions, competition and consumers’ rights protection institutions of the
Republic of Lithuania, other European Union Member States and non-member states as
well as with other institutions of the Republic of Lithuania;
14) submit recommendations to the Chamber of Insurance Brokers, professional
association of actuaries, insurance undertakings and branches of non-member-country
insurance undertakings exercising control over the activities of dependent insurance
intermediaries in order to ensure that the functions of the said associations and the
functions of the insurance undertaking or a branch of the non-member-country insurance
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undertaking, related to the control of dependent insurance intermediaries, should be
disclosed to the public and be transparent;
15) represent the interests of the Republic of Lithuania at the institutions of the
European Union and their working bodies within the remit of its competence;
16) perform other functions established by this Law and other legal acts of the
Republic of Lithuania.
Article 193. Rights of the Supervisory Commission
1. The Supervisory Commission, while carrying out its functions, shall have the
right to:
1) receive information from all natural and legal persons necessary for it to carry
out its supervisory functions;
2) engage competent persons and grant them relevant powers for the purpose of
exercise its functions;
3) carry out inspections of insurance undertakings, companies of insurance
intermediaries, branches of non-member-country insurance undertakings and branches of
independent insurance intermediaries established in the Republic of Lithuania, as well as
other persons specified in this Law;
4) apply sanctions established by this and other laws to persons found to have
contravened this Law and other legal acts of the Republic of Lithuania regulating
insurance and insurance mediation activity;
5) adopt legal acts established by this Law and other legal acts elaborating on the
provisions of this Law;
6) establish the procedure and terms of insurance activities of insurance classes, the
terms of the contracts of insurance against separate insurance risks, including compulsory
insurance, the requirements that the insurer must comply with when providing services to
the customers using means of communications;
7) apply to the court requesting repeal of the decision of an insurance undertaking
or a company of insurance brokers in the cases specified in paragraph 4 of Article 2.82 of
the Civil Code as well as invalidation of the contracts concluded by the insurance
undertaking or insurance broker company by reason of the said decisions;
8) participate in international institutions for the supervision of insurance
undertakings, insurance intermediaries and other financial institutions;
9) conclude agreements regarding co-operation and exchange of information with
competent authorities, financial and capital market supervision institutions, competition
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and consumers’ rights protection institutions of the Republic of Lithuania, other European
Union Member States and non-member states as well as with other institutions of the
Republic of Lithuania.
10) in implementing the objective specified in Article 181(3) of this Law, bring an
action for the protection of public interest and/or join the proceedings at its own initiative
in order to present the finding in the case.
2. The Supervisory Commission shall also have other rights established in this Law
and other legal acts.
3. The right of the Supervisory Commission specified in subparagraph 1, paragraph
1 of this Article may also be exercised by the chairman of the Supervisory Commission,
any member of the Commission, a public servant of the administration or a representative,
while carrying out an inspection.
Article 194. Legal Acts of the Supervisory Commission
1. Decisions of the Supervisory Commission adopted while carrying out the
functions of the Supervisory Commission and exercising the rights of the Supervisory
Commission, shall be executed in the form of resolutions of the Supervisory Commission
2. The Supervisory Commission shall have the right to delegate the implementation
of resolutions adopted while exercising the rights of the Supervisory Commission
established in subparagraphs 4, 7 to 10 of Article 193 of this Law to the chairman of the
Supervisory Commission.
Article 195. General Provisions Regarding Decisions Adopted by the
Supervisory Commission
1. If this Law and other legal acts establish that in order to pass a decision the
Supervisory Commission must be submitted documents, the Supervisory Commission
shall have the right to require that the applicant submits additional documents and
information required for the passing of a decision. In this case the Supervisory
Commission must give its request an elaborate justification, inform the applicant thereof
and fix the deadline for the submission of documents and information.
2. If the Supervisory Commission requested to submit additional documents and
information in the manner established by this Law, the deadline for the adoption of the
decision regarding a licence to engage in insurance activity, a licence to engage in the
activities of insurance brokers, and other authorisations shall be counted from the day of
receipt of all the documents and information necessary for passing the decision.
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3. In case of a negative decision, the Supervisory Commission shall indicate to the
applicants the clear-cut motives of such a decision and inform applicants about it.
4. The decision made by the Supervisory Commission or failure to adopt one
within the time limit set in legal acts may be appealed in court in the manner prescribed by
law.
Article 196. Right of the Supervisory Commission to Information
1. Upon the request of the Supervisory Commission, state and municipality
institutions and other natural and legal persons must present information, including
confidential information required for the implementation and exercising of functions and
rights of the Supervisory Commission.
2. The Supervisory Commission shall have the right to address competent
authorities, financial and capital market supervision institutions or other institutions and
natural and legal persons of other European Union Member States or non-member states
with the request to present information required for the implementation and exercising of
functions and rights of the Supervisory Commission.
Article 197. Sanctions
The Supervisory Commission shall have the right to impose the following
sanctions:
1) to warn insurance undertakings, insurance intermediaries, branches of nonmember-country insurance undertakings or branches of independent insurance
intermediaries established in the Republic of Lithuania of the shortcomings or
infringements discovered in their work, and set the deadline for the elimination thereof;
2) to impose administrative penalties on members of the supervisory and
management boards, heads of administration of insurance undertakings, insurance brokers,
insurance intermediaries, heads of branches of non-member-country insurance
undertakings or branches of independent insurance intermediaries established in the
Republic of Lithuania, the chief accountants and chief actuaries of insurance undertakings
and branches of non-member-country insurance undertakings established in the Republic
of Lithuania as well as the persons who have illegally disclosed information of the
Supervisory Commission related to supervision of the entities specified in this Law;
3) to impose penalties established in Article 201 of this Law on the grounds
specified in Article 201 of this Law;
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4) in the case specified in Article 40 of this Law to demand that an insurance
undertaking or a branch of a non-member-country insurance undertaking submits plans for
the restoration of financial situation and to set a deadline for the submission of the pans;
5) on the grounds established in Article 199 of this Law to authorise an insurance
undertaking or a branch of a non-member-country insurance undertaking to assign the
rights and obligations under the insurance contracts within the time period set by the
Supervisory Commission;
6) to demand that the bodies of an insurance undertaking replace the supervisory
body or its member, the board or its member, the head of the administration, chief
accountant or chief actuary within the time period set by the Supervisory Commission;
7) to demand that a non-member-country insurance undertaking replaces, within
the time period set by the Supervisory Commission, the head, chief accountant or chief
actuary of the branch of the non-member-country insurance undertaking established in the
Republic of Lithuania;
8) to demand that an insurance undertaking replaces, within the time period set by
the Supervisory Commission, the liquidator, the chairman or a member of the liquidation
commission, the person responsible for the liquidation of the branch of the non-membercountry insurance undertaking established in the Republic of Lithuania;
9) to seize, on the grounds, specified in Article 200 of this Law, the assets covering
insurance technical provisions of insurance undertakings and branches of non-membercountry insurance undertakings established in the Republic of Lithuania;
10) to remove the insurance broker from the list of insurance brokers or suspend
the insurance broker’s certificate;
11) to suspend the licence to engage in insurance activity, the licence to engage in
activities of insurance brokers, the authorisation to engage in insurance activities of a
branch of a non-member-country insurance undertaking or in the activities of a branch of
independent insurance intermediaries of any other non-member state in the Republic of
Lithuania, or the validity of the rights granted by them, to temporarily prohibit the
dependent insurance intermediary to engage in the activities of insurance mediation;
12) on the grounds specified in Article 19(2), Article 66 (2), Article 150(2) of this
Law or, where appropriate, on the grounds specified in Article 179(2), to revoke the
licence for insurance activity, licence to engage in the activity for an insurance broker
company, authorisation for insurance activity of a branch of a non-member-country
insurance undertaking or activities of a branch of independent insurance intermediaries of
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any other non-member state in the Republic of Lithuania, to permanently prohibit an
insurance intermediary from engaging in the activities of insurance mediation.
Article 198. Grounds for the Imposition of Sanctions
1. Except for the cases where Article 197 specifies the grounds for the imposition
of a specific sanction, the Supervisory Commission shall impose the sanctions specified in
Article 197 of this Law in the presence of any of the following grounds:
1) in case the Supervisory Commission has been refused information or the
information furnished is inaccurate;
2) in case of violation of the laws of the Republic of Lithuania, the Supervisory
Commission resolutions or other legal acts;
3) in case of non-compliance with the requirements which had to be met when
establishing an insurance undertaking, an insurance broker company, a branch of a nonmember-country insurance undertaking or a branch of independent insurance
intermediaries in the Republic of Lithuania or when the above entities no longer not meet
the established requirements;
4) in case of failure to adhere to the plan for the restoration of financial situation
approved by the Supervisory Commission for the insurance undertaking or an insurance
undertaking of any other non-member-country;
5) when the group structure to which the insurance undertaking belongs makes
effective supervision impossible;
6) when the persons in control of the insurance undertaking, the participating
undertakings, members of supervisory and management bodies, head of the administration,
chief accountant or chief actuary do not meet the criteria established in Article 20 of this
Law; when the persons in control of the non-member-country insurance undertaking, the
participating undertakings, members of supervisory and management bodies, head of the
administration, chief accountant or chief actuary do not meet the criteria established in
Article 64 of this Law; when the persons in control of the insurance broker company, the
participating undertakings, members of supervisory and management bodies, head of the
administration of a company of insurance brokers do not meet the criteria established in
Article 148 of this Law; when the persons in control of non-member-country independent
insurance intermediaries, the participating undertakings, members of supervisory and
management bodies, head of the branch do not meet the criteria established in
subparagraph 2, paragraph 2, Article 178 of this Law;
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7) in the event of deterioration of the financial situation of an insurance
undertaking, a company of insurance brokers, a branch of a non-member-country
insurance undertaking or a branch of independent insurance intermediaries and when the
undertaking/company no longer meets the requirements established by legal acts; if the
interests of policyholders, the insured, beneficiaries or injured party are infringed, or when
the threat of such a deterioration or infringement arises;
8) shareholders of an insurance undertaking have a negative effect or intend to
have a negative effect on the transparent, prudent and credible management of the
insurance undertaking;
9) standard conditions of insurance contracts of an insurance undertaking or a
branch of a non-member-country insurance undertaking do not meet the requirements
established by legal acts.
2. The Supervisory Commission shall choose a sanction having regard to the
contents of the violation for which it is imposed, personal fault, proportionality of the
violation and sanction, the consequences of the violation and the imposed sanction for the
person on whom the sanction is imposed and for the security, stability and credibility of
the system of insurance and insurance mediation.
3. The resolution on the imposition of a sanction, except for the one specified in
subparagraph 2 of Article 197 of this Law, shall be adopted within 3 months from the date
of establishment of the violation or the grounds for the imposition of the sanction.
Violations shall not be subject to sanctions after the lapse of more than 2 years from the
day of their commission.
4. The issue of the imposition of a sanction shall be considered in the presence of
the person who is subject to the sanction, or his representatives. Absence of the person or
his representatives, if they were given due notice of the hearing of the issue, shall not
preclude the passing of the resolution to impose a sanction.
5. Any violation shall be subject to one sanction only, save for the exceptions
established in this Law. Imposition of a sanction shall not exempt the person from
fulfilling the obligation, failure of fulfilment whereof served as grounds for the imposition
of the sanction.
Article 199. Compulsory Transfer of Rights and Obligations Under Insurance
Contracts
1. If the insurance undertaking faces a threat of insolvency or if there is a threat of
the liabilities of the branch of the non-member-country insurance undertaking exceeding
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the assets assigned to it, in order to ensure protection of the interests of the policyholders,
insured, beneficiaries and injured party the Supervisory Commission shall have the right to
obligate the insurance undertaking or the branch of the non-member-country insurance
undertaking to transfer the rights and obligations under insurance contracts to the entities
intending to take them over.
2. In the case specified in paragraph 1, Article 127 of this Law the Supervisory
Commission must obligate to transfer the rights and obligations under insurance contracts.
3. An agreement on the transfer of the rights and obligations may not be and shall
not be subject to a resolution passed by the insurance undertaking’s general meeting of
shareholders, the supervisory board or the board or any consent granted by these bodies.
The agreement shall be signed by the head of the administration of the insurance
undertaking or the head of the branch of the non-member-country insurance undertaking.
4. The procedure of compulsory transfer of rights and obligations under insurance
contracts shall be subject to the provisions of Articles 41 and 42 of this Law, except that
instead of the Supervisory Commission’s authorisation provided for in the said Articles the
Supervisory Commission shall be required to confirm compliance with the requirements
established by legal acts for the transfer of rights and obligations under insurance
contracts.
Article 200. Seizure of Assets
1. The Supervisory Commission shall have the right to seize the assets covering
insurance technical provisions of an insurance undertaking or a branch of an insurance
undertaking of a non-member-country under at least one of the following conditions:
1) an insurance undertaking or a branch of the non-member-country insurance undertaking
fails to meet the requirements regarding the establishment of technical provisions and
covering thereof with assets (paragraph 1 of Article 36);
2) an insurance undertaking or a branch of the non-member-country insurance undertaking
violates the solvency margin requirements and there is a threat of deterioration of the
financial situation of the insurance undertaking or the branch of the non-member-country
insurance undertaking (paragraph 3 of Article 40);
3) an insurance undertaking or a branch of the non-member-country insurance undertaking
fails to submit a plan for the restoration of the financial situation or to fulfil it (paragraph 6
of Article 40);
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4) an insurance undertaking or a branch of the non-member-country insurance undertaking
fails to carry out the obligation to transfer rights and obligations under insurance contracts
imposed by the Supervisory Commission;
5) in the event of revocation of the licence to engage insurance activity or of the
authorisation to engage in insurance activity of the insurance branch.
2. Seizure of assets shall be imposed according to procedures prescribed in
paragraphs 2 through 4, Article 198 of this Law. The notice of seizure shall be signed by
the chairman of the Supervisory Commission. Seizure acts shall be registered according to
procedures specified in the Law of the Republic of Lithuania on the Register of Property
Seizure Notices.
3. The Supervisory Commission shall have the right to enter an action in court for
the invalidation of the transaction involving the seized assets.
Article 201. Financial Penalties Imposed by the Supervisory Commission
1. A penalty in the amount of up to EUR 30 000 may be imposed on an insurance
undertaking or branch of the non-member-country insurance undertaking engaged in
insurance or insurance related activity which, according to the licence to engage in
insurance activity or an authorisation for the activities of a branch, the above persons have
no right to engage in.
2. A penalty in the amount of up to EUR 20 000 may be imposed on an insurance
undertaking, insurance intermediaries or a branch of a non-member-country insurance
undertaking or a branch of independent insurance intermediary, which refused to furnish
information or furnished false information to the Supervisory Commission.
3. A penalty in the amount of up to EUR 100 000 may be imposed on an insurance
undertaking, insurance intermediaries or a branch of a non-member-country insurance
undertaking or of independent insurance intermediary, which committed gross violation of
this Law or any other legal act regulating insurance and insurance mediation activity.
4. Penalty shall be imposed according to procedure prescribed in paragraphs 2
through 4 of Article 198 of this Law.
5. A penalty imposed by the Supervisory Commission shall be paid into the State
Budget within one month from the date when an insurance undertaking, insurance
intermediaries or a branch of a non-member-country insurance undertaking or of
independent insurance intermediary received the decision on the imposition of the penalty.
6. An unpaid penalty shall be recovered according to procedure prescribed by the
Code of Civil Procedure.
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7. The imposition of financial penalties shall not exempt the legal person or heads
of a branch from civil and criminal liability established by law.
Article 202. Supervision of Insurance Undertakings of other European
Union Member States which Provide Services in the Republic of Lithuania and of
Branches of Insurance Undertakings of European Union Member States, Established
in the Republic of Lithuania
1. Financial supervision of insurance undertakings of other European Union
Member States, providing their services in the Republic of Lithuania, or of branches of
such undertakings established in the Republic of Lithuania shall be carried out by a
competent authority of this European Union Member State. Despite this provision, the
Supervisory Commission shall have the rights and obligations established in this Article.
2. The Supervisory Commission:
1) shall have the right to receive information from an insurance undertaking of a
European Union Member State for it to carry out its supervisory functions;
2) shall have the right to carry out inspections of the branch in the Republic of
Lithuania according to procedure prescribed in Article 205;
3) shall have the right to participate at the inspection of a branch of an insurance
undertaking of a European Union Member State established in the Republic of Lithuania
which is carried out by the competent authority of the European Union Member State;
4) shall have the right to impose sanctions prescribed by paragraph 3 of this Article
in case there are grounds provided for in subparagraphs 1 and 2, paragraph 2, Article 198
of this Law, also in the event of deterioration of the financial situation of the insurance
undertaking of any other European Union Member State so that it no longer meets the
requirements set by legal acts, in case of infringement of the interests of the policyholders,
insured, beneficiaries or injured party or in the event of a threat of such deterioration of
infringement, or where the risky activity of a branch of an insurance undertaking of a
European Union Member State may be detrimental to the interests of the policyholders,
insured persons, injured party and beneficiaries;
5) upon receiving a request from the competent authority of any other European
Union Member State, provided for in Article 212 of this Law, impose sanctions referred to
in subparagraphs 3 and 4 of paragraph 3 of this Article without taking into consideration
other provisions of this Article;
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6) give recommendations and mandatory instructions to an insurance undertaking
of any other European Union Member State or its branch concerning their activities in the
Republic of Lithuania.
3. The following sanctions may imposed on the insurance undertaking of any other
European Union Member State:
1) to warn an insurance undertaking of any other European Union Member State of
the established infringements of legal acts of the Republic of Lithuania and set the
deadline for the elimination of the infringements;
2) impose administrative penalties on the head of the branch of the insurance
undertaking of any other European Union Member State, demand his replacement;
3) in the manner specified in paragraphs 2 and 3, Article 200 of this Law and on
the request of the competent authority of any other European Union Member State seize
the assets of the insurance undertaking of any other European Union Member State
situated in the Republic of Lithuania;
4) temporarily or permanently prohibit the insurance undertaking of any other
European Union Member State from engaging in activities in the Republic of Lithuania.
4. If an insurance undertaking of any other European Union Member State violates
legal acts of the Republic of Lithuania applied to it, does not submit information to the
Supervisory Commission or is engaged in risky activities, which may be detrimental to the
interests of the policyholders, insured, third persons and beneficiaries, the Supervisory
Commission shall first of all warn the insurance undertaking of the established violations
of legal acts of the Republic of Lithuania and shall set the deadline for the elimination
thereof. If the situation is not rectified in the manner and within time period established by
the Supervisory Commission, the Supervisory Commission shall inform the competent
authority of the European Union Member State and shall demand that it should undertake
all measures permissible under law to eliminate the violations.
5. If it transpires that the measures provided for in paragraph 4 of this Article are
not sufficient to eliminate the violations, the Supervisory Commission, upon notifying the
competent authority of any other European Union Member State, shall have the right to
impose sanctions referred to in subparagraphs 2 - 4, paragraph 3 of this Article. In case of
urgent necessity the Supervisory Commission shall have the right to impose these
sanctions without taking into consideration provisions of paragraph 4 of this Article.
6. The sanction shall be chosen having regard to the nature of the infringement for
which it is to be applied, the consequences the infringement and the sanction to be applied
will have on the insurance undertaking of any other European Union Member State and on
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the security, stability and credibility of the insurance system. The Supervisory
Commission shall notify the insurance undertaking of any other European Union Member
State in writing of the sanction at the same time providing justification of the imposition of
these sanctions.
7. The resolution regarding the imposition of a sanction may be appealed against in
accordance with the procedure established be law.
Article 203. Supervision of Activities of Insurance Intermediaries of any other
European Union Member State, Providing Services in the Republic of Lithuania, or
of Branches of these Intermediaries Established in the Republic of Lithuania
1. Supervision of insurance mediation activities of insurance intermediaries of any
other European Union Member State, providing services in the Republic of Lithuania, or
of branches of these insurance intermediaries established in the Republic of Lithuania shall
be carried out by the competent authority of this European Union Member State. Despite
this provision, the Supervisory Commission shall have the rights and obligations
established in this Article.
2. The Supervisory Commission shall have the right to:
1) receive information from an insurance intermediary of any other European
Union Member State or a branch established by it;
2) carry out inspections of a branch of the insurance intermediary of any other
Member State according to the procedure laid down in Article 205 of this Law;
3) participate at the inspection of a branch of insurance intermediary of this
European Union Member State which is being carried out by the competent authority of
the other European Union Member State;
4) impose sanctions provided for in paragraph 3 of this Article on the grounds
specified in subparagraphs 1 and 2, paragraph 1, Article 198 of this Law, also in case of
deterioration of the financial situation of the branch of the insurance intermediary of any
other Member State and it no longer meets the requirements of legal acts or in case of
infringement of the interests of the policyholders, insured, beneficiaries or injured party or
if a threat of such deterioration or infringement arises or where the risky activity of the
insurance intermediary or its branch may be detrimental to the interests of the
policyholders, insured, injured third party and beneficiaries;
5) give recommendations and mandatory instructions to an insurance intermediary
of a European Union Member State or its branch concerning their activities in the Republic
of Lithuania.
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3. The Supervisory Commission shall have the right to impose the following
sanctions on the insurance intermediary of a European Union Member State or its branch:
1) to warn an insurance intermediary of any other European Union Member State
of the established infringements of legal acts of the Republic of Lithuania and set the
deadline for the elimination thereof;
2) to impose administrative penalties on the head of the branch of the insurance
intermediary of any other European Union Member State established in the Republic of
Lithuania in the manner established by law;
3) to demand replacement of the head or the staff involved in mediation activities
of the branch of the insurance intermediary of any other European Union Member State
established in the Republic of Lithuania;
4) to seize, according to the procedure laid down in paragraphs 2 and 3 of Article
200 and upon the request of the competent authority of any other European Union Member
State, the assets of an insurance intermediary of any other European Union Member State
or its branch, situated in the Republic of Lithuania;
5) to temporarily or permanently prohibit the activity of the insurance intermediary
in the Republic of Lithuania.
4. The Supervisory Commission shall chose the sanction having regard to the
nature of the infringement for which it is to be applied, the consequences the infringement
and the sanction to be applied will have on the insurance intermediary of any other
European Union Member State or its branch. The Supervisory Commission shall
immediately inform the competent authority of the European Union Member State of the
applied sanction.
5. The resolution regarding the application of a sanction may be appealed against in
accordance with the established procedure. The appeal shall not suspend the enforcement
of the resolution.
Article 204. The Supervisory Commission’s Rights to Information Related
with the Activities of Reinsurance and Reinsurance Mediation
1. The provisions of this Article shall apply to:
1) reinsurance undertakings of the Republic of Lithuania,
2) reinsurance undertakings of the European Union Member States and nonmember states, which conclude contracts without having established branches in the
Republic of Lithuania or having established branches in the Republic of Lithuania,
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3) reinsurance intermediaries of other European Union Member States and nonmember-countries, which conclude contracts having not established branches in the
Republic of Lithuania or having established branches in the Republic of Lithuania.
2. The Supervisory Commission shall have the right to receive information from
the persons referred to in paragraph 1 of this Article, and to carry out inspections of
reinsurance undertakings of the Republic of Lithuania or branches or agencies in the
Republic of Lithuania of persons referred to in subparagraphs 2 and 3, paragraph 1 of this
Article.
3. Reinsurance undertakings of the Republic of Lithuania and branches of nonmember-country reinsurance undertakings, established in the Republic of Lithuania, must
publish in the manner established by the Supervisory Commission the annual financial
statements audited by an audit company.
4. If the requirements laid down in paragraphs 2 and 3 of this Article are not met,
the Supervisory Commission shall have the right to temporarily or permanently prohibit
insurance undertakings of the Republic of Lithuania or branches of non-member-country
insurance undertakings established in the Republic of Lithuania from concluding
reinsurance contracts with or through the persons referred to in paragraph 1 of this Article.
5. The Supervisory Commission shall have the right to apply to court for the
institution of bankruptcy proceedings against the reinsurance undertaking of the Republic
of Lithuania.
Article 205. On-site Inspections Conducted by the Supervisory Commission
1. The Supervisory Commission shall have the right to organise and conduct onsite inspections in order to verify compliance with this Law and legal acts adopted on its
basis.
2. The procedure for conducting on-site inspections shall be established by the
Supervisory Commission.
3. The Supervisory Commission shall have the right to conduct on-site inspections
of the following entities:
1) insurance undertakings and insurance intermediaries of the Republic of
Lithuania;
2) insurance undertakings and branches of insurance undertakings of the Republic
of Lithuania established in any other European Union Member State, upon advance
notification of the competent authority of that European Union Member State and having
created conditions for representatives of this authority to take part in the on-site
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inspection;
3) a branch of insurance undertaking or insurance intermediary of any other
European Union Member State established in the Republic of Lithuania, on request of the
competent authority of that Member State and having created conditions for
representatives of the said authority to take part in the on-site inspection;
4) a branch of a non-member-country insurance undertaking established in the
Republic of Lithuania, upon advance notification of the competent authority of that state
and having created conditions for representatives of the said authority to take part in the
on-site inspection;
5) persons with whom an insurance undertaking or a branch of a non-membercountry insurance undertaking has concluded contracts specified in paragraph 1, Article 27
of this Law;
6) undertakings referred to in paragraph 2, Article 48 of this Law;
7) persons who are illegally engaged in the activities of an insurance undertaking
or insurance intermediaries or who are connected to infringements of this Law or legal acts
passed on the basis of it;
8) reinsurance undertakings of the Republic of Lithuania, branches and agencies of
reinsurance undertakings of European Union Member States and non-member-countries
established in the Republic of Lithuania, branches and agencies of reinsurance
intermediaries of the European Union Member States and non-member-countries,
established in the Republic of Lithuania. A respective competent authority of a European
Union Member State or a non-member-country shall be informed about the on-site
inspection in advance.
4. While conducting the on-site inspection, the public servants of the
administration of the Supervisory Commission shall have the right to:
1) receive verbal or written explanations from the persons under on-site inspection,
request their or their representatives’ appearance at the official premises of the public
servant conducting the inspection for giving explanations;
2) having presented an official id document and the decision of the Supervisory
Commission, conduct an on-site inspection (audit), freely enter premises of legal person
during working hours, check documents, accounting registers and other sources of
information required for the inspection, and obtain findings of examination agencies or
experts based on the inspection material;
3) request or make copies of accounting documents, contracts, orders, and other
documents and information;
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4) temporarily, but for not longer than 1 month, take documents of legal persons
under inspection which may be used as proof of an infringement, leaving a substantiated
decision regarding seizure of the documents and the writ of the seizure of documents;
5) having presented the decision of the Supervisory Commission, obtain from
credit and finance institutions information, certificates and copies of documents relating to
financial operations connected with the legal person under inspection.
5. The rights of the Supervisory Commission to conduct on-site inspections of
insurance undertakings, branches of insurance intermediaries, and other persons of the
Republic of Lithuania established in a non-member-country shall be defined in cooperation agreements concluded with the competent authorities of non-member-countries.
6. In order to exercise the rights provided for in paragraph 4 of this Article, the
public servants of the administration of the Supervisory Commission in the Republic of
Lithuania may enlist the assistance of police officers.
Article 206. Insurance Policy Conditions and other Information
1. The Supervisory Commission shall have no right to demand that insurance
policy conditions and other insurance terms and conditions, tariffs of insurance premiums,
and other documents used in contractual relations of insurance, and in the case of life
assurance – also actuarial information which is used to calculate tariffs of insurance
premiums and/or insurance technical provisions be submitted for advance approval or on a
regular basis.
2. The Supervisory Commission, addressing the insurer, shall have the right to
demand that it presents insurance policy conditions and other insurance terms and
conditions, tariffs of insurance premiums, and other documents used in contractual
relations of insurance, and in the case of life assurance – also actuarial information which
is used to calculate tariffs of insurance premiums and/or insurance technical provisions.
The Supervisory Commission shall have the right to check compliance of the submitted
documents and the information with the provisions of legal acts regulating contractual
relations of insurance, and in the case of life assurance - with provisions of legal acts
regarding an insurance undertaking of the Republic of Lithuania or a branch of insurance
undertaking of any other non-member state established in the Republic of Lithuania, and
the actuary principles used. The requirement to submit this information cannot be a
precondition for activities of the insurer. The Supervisory Commission shall have no right
to prescribe submission of the above-specified information on regular basis.
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Article 207. Settlement of Disputes between Consumer and Insurer
1. The Supervisory Commission shall settle disputes between consumer and insurer
which arise from an insurance contract or are related to it, if the legal acts of the Republic
of Lithuania are applicable to the insurance contract. For the purposes of this Article,
consumer shall imply not only a policyholder who purchases an insurance service for
personal, family or household needs, but also an insured person, a beneficiary or an injured
third party, where the insurance service, regardless of who is the policyholder under a
particular insurance contract, is intended for their personal or household needs, and the
insurer, in concluding the insurance contract, knew or should have known the purpose of
the insurance contract.
2. Consumers shall have the right to address the Supervisory Commission only
after having addressed the insurer and received his final negative decision on the matter of
dispute. Consumers shall have the right to address the Supervisory Commission within 2
months from the receipt of a negative answer is received. If, within 2 months after
addressing the Supervisory Commission, the insurer does not render any decision, the
consumer shall have the right to address the Supervisory Commission within 2 months
from the expiry of the time period.
3. The settlement of disputes is not subject to any fee.
4. The right to address the Supervisory Commission shall not deprive consumers of
the right to apply directly to the court.
5. The Supervisory Commission shall not settle disputes and terminate the
settlement started, if:
1) the consumer and the insurer have agreed to submit the dispute for settlement by
arbitration, mediation, conciliation, or other alternative dispute resolution procedure;
2) the dispute is being considered (has been settled) by arbitration, mediation,
conciliation, or other alternative dispute resolution procedure;
3) the dispute is being heard (has been settled) in court.
6. The Supervisory Commission shall settle disputes in writing via correspondence
with the insurer and the consumer. Disputes shall be settled in Lithuanian and/or, as
necessary, in English.
7. A dispute must be settled within 3 months from application by a consumer. In
certain cases, taking into account the complexity of the dispute, the Supervisory
Commission shall have the right to extend the time period for not longer than up to 3
months,.
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8. The Supervisory Commission shall mediate between the parties to the dispute
seeking a mutually satisfying decision. If they fail to reach such a decision, the
Supervisory Commission shall decide the dispute on the merits. If it establishes that laws
have been violated, the Supervisory Commission shall also have the right to apply
sanctions, provided for in Chapter IX Section Two of this Law.
9. The decision of the Supervisory Commission shall be of advisory nature.
10. Dispute settlement rules, binding on the parties to the dispute, shall be
established by the Supervisory Commission.
SECTION THREE
CO-OPERATION WITH THE COMMISSION OF EUROPEAN COMMUNITIES
AND COMPETENT AUTHORITIES OF OTHER EUROPEAN UNION MEMBER
STATES
Article 208. Co-operation on the Issues of Supervision of Direct Insurance
1. The Supervisory Commission must closely co-operate with the Commission of
the European Communities and competent authorities of the other European Union
Member States on the issues of improvement of supervision of direct insurance in the
European Union.
2. The Supervisory Commission must inform the Commission of the European
Communities about the major difficulties arising when applying the provisions of legal
acts of the Republic of Lithuania drawn up on the basis of directives of the European
Union, and together with the Commission of the European Communities and other
European Union Member States analyse the problems encountered in order to find an
appropriate solution to these problems.
Article 209. Information on Compulsory Insurance
1. The Supervisory Commission must inform the Commission of the European
Communities about the compulsory insurance in the Republic of Lithuania, indicating the
following:
1) legal norms regulating compulsory insurance;
2) information which must be included in the insurance policy of compulsory
insurance.
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2. Compulsory insurance policies and other certificates of insurance undertakings
of the European Union Member States, the contents of which corresponds to the contents
of such documents as published in the Official Journal of the European Communities, shall
be recognised in the Republic of Lithuania.
Article 210. Information Connected with Non-member Country Persons
1. The Supervisory Commission, when presenting information about the structure
of the group to which the subsidiary of the insurance undertaking belongs must inform the
Commission of the European Communities about the following:
1) the granting of a licence to engage in insurance activity for an insurance
undertaking which, directly or indirectly, is a subsidiary of a non-member-country legal
person or persons;
2) shares of an insurance undertaking acquired by a non-member-country legal
person or persons, if this company becomes a subsidiary of the insurance undertaking.
2. The Supervisory Commission must inform the Commission of the European
Communities about major obstacles and difficulties encountered by insurance
undertakings of the Republic of Lithuania in non-member-countries.
3. Upon request of the Commission of the European Communities, the Supervisory
Commission must temporarily suspend procedures regarding:
1) granting of authorisations to engage in insurance activities of a branch of a nonmember-country insurance undertaking in the Republic of Lithuania or granting of a
licence to engage in insurance activity for an insurance undertaking which, directly or
indirectly, is a subsidiary of a non-member-country legal person or persons;
2) issuance of authorisations to acquire shares of an insurance undertaking for a
non-member-country legal person or persons, who, following the acquisition, will directly
or indirectly have a subsidiary in the Republic of Lithuania.
4. Procedures provided for in paragraph 3 of this Article shall be suspended for a
not longer the 3-month period, however, upon the request of the Commission of the
European Communities the Supervisory Commission must extend this term.
5. Provisions set forth in paragraph 3 of this Article shall not be applicable if
subsidiaries of insurance undertakings of non-member-country legal persons are
established in other European Union Member States or if subsidiaries of these insurance
undertakings are establishing a subsidiary in the Republic of Lithuania, or intend to
acquire shares of an insurance undertaking in the Republic of Lithuania.
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6. Upon request of the Commission of the European Communities, the Supervisory
Commission must inform the Commission of the European Communities about:
1) all applications regarding the granting of authorisations for activities of branches
of non-member-country insurance undertakings in the Republic of Lithuania or
applications for the granting of a licence to engage in insurance activity for an insurance
undertaking which, directly or indirectly, is a subsidiary of a non-member-country legal
person or persons;
2) applications of a non-member-country legal person or persons to acquire shares
of an insurance undertaking, who after this acquisition of shares will directly or indirectly
have a subsidiary in the Republic of Lithuania.
Article 211. Transfer of Rights and Obligations under Insurance Contracts
1. If a competent authority of any other European Union Member State requests the
Supervisory Commission for its opinion regarding intentions of the insurance undertaking
supervised by this authority to transfer the rights and obligations under insurance contracts
to an insurance undertaking of the Republic of Lithuania, the Supervisory Commission
must within 3 months inform about its objection or consent.
2. The Supervisory Commission shall have the right to object to the transfer of
rights and obligations under insurance contracts only where the solvency margin of an
insurance undertaking of the Republic of Lithuania or a branch of a non-member-country
insurance undertaking in the Republic of Lithuania, required under legal acts, is not
maintained.
Article 212. Sanctions
1. Upon receiving information from the competent authority of any other European
Union Member State about restrictions on the management, use and disposal of assets
imposed on the insurance undertaking of the state and a request to impose analogous
restrictions in the Republic of Lithuania, the Supervisory Commission must make a
decision regarding imposition of these restrictions (seizure of assets) in the Republic of
Lithuania.
2. Upon receipt of information from the competent authority of the European
Union Member State about revocation of a licence to engage in insurance activity of the
insurance undertaking of that state, the Supervisory Commission must adopt a decision to
prohibit this insurance undertaking from engaging in insurance activities in the Republic of
Lithuania.
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Article 213. Intervention Measures
1. Intervention measures which are applied by the institutions of the European
Union Member States that will or may affect natural and legal persons of the Republic of
Lithuania shall be fully recognised in the Republic of Lithuania without any additional
formalities even if the measures of this kind are not provided for in the Republic of
Lithuania or application in the Republic of Lithuania of the intervention measures is linked
to fulfilment of certain additional conditions, and these conditions have not yet been
fulfilled.
2. Intervention measures applied by other European Union Member States shall
come into force in the Republic of Lithuania at the same time they become effective in the
European Union Member State.
3. Having received information from a competent authority of a European Union
Member State about the adopted decision to apply intervention measures, the Supervisory
Commission, taking into consideration the possible effect of such measures on natural and
legal persons of the Republic of Lithuania, shall have the right to announce the received
information in the supplement Informaciniai pranešimai to the official gazette Valstybės
žinios.
Article 214. Supplementary Supervision
1. Upon request of the competent authority of any other European Union Member
State, the Supervisory Commission shall itself carry out the verification of information
material for the supplementary supervision or allow this authority, an audit company
indicated by this institution, or other expert to carry out the verification itself in the
Republic of Lithuania:
1) in undertakings related with an insurance undertaking of any other European
Union Member State;
2) in a subsidiary of an insurance undertaking of any other European Union
Member State;
3) in a parent company of an insurance undertaking of any other European Union
Member State;
4) in subsidiaries of a parent company of the insurance undertaking of any other
European Union Member State.
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Article 215. Liquidation and Bankruptcy
1. The Supervisory Commission, upon receiving information from the competent
authority of any other European Union Member State regarding the adopted decision to
liquidate an insurance undertaking of any other European Union Member State or to
institute a bankruptcy for it, shall have the right to announce the obtained information in
the supplement Informaciniai pranešimai to the state gazette Valstybės žinios taking into
consideration the possible effect of such a decision on natural and legal persons of the
Republic of Lithuania.
2. The decision to liquidate an insurance undertaking of any other European Union
Member State and its branches in the Republic of Lithuania shall be fully recognised in the
Republic of Lithuania without any additional formalities and shall come into force at the
moment it becomes effective in the European Union Member State.
3. A person appointed by the state institution of any other European Union Member
State or any other entity to the position analogous to that referred in paragraph 1 of Article
143 of this Law, who intends to engage in activities in the Republic of Lithuania must
have a copy of translation of the decision on the appointment into the Lithuanian language.
Legalisation and other similar formalities shall not be required.
4. Persons referred to in paragraph 3 of this Article or their representatives,
appointed according to the procedures established by legal acts of any other European
Union Member State, shall have the right to perform in the Republic of Lithuania all
actions which they have the right to perform in that European Union Member State.
CHAPTER X
FINAL PROVISIONS
Article 216. Entry into Force of the Law
1. This Law shall come into force on 1 January 2004, except for the provisions of
this Law referred to in this Chapter.
2. After this Law comes into force, the following laws shall be repealed:
1) Law on Insurance of the Republic of Lithuania;
2) Law Amending Article 2 of the Law on Insurance of the Republic of
Lithuania;
3) Law Amending Article 2 of the Law on Insurance of the Republic of
Lithuania;
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4) Law Amending Articles 2, 7, 11, 17, 22, 27, 28, 29, 31, 37, 39, 42, 43, 45, 46,
47, 60, 63, 66 of the Law on Insurance of the Republic of Lithuania;
5) Law Amending Articles 27 and 29 of the Law on Insurance of the Republic of
Lithuania;
6) Law Amending Article 32 of the Law on Insurance of the Republic of
Lithuania;
7) Law Amending Articles 2, 5, 23, 24, 25, 27, 53, 54, 55, 63, 64, 65, 66 of the
Law on Insurance of the Republic of Lithuania and Supplementing the Law with Articles
301, 401, 402, 661, 671;
8) Law Amending Section Two of the Law on Insurance of the Republic of
Lithuania and Supplementing the Law with Article 70;
9) Law Amending Articles 2, 27, 29, 31, 32, 36, 37, 38, 401, 53, 55, 56, 62, 64,
65 of the Law on Insurance of the Republic of Lithuania and Supplementing the Law with
Articles 341, 342, 371, 372, 373, 374, 381, 382, 383, 71.
Article 217. Provisions Relating to European Union Membership of the
Republic of Lithuania
1. Provisions relating to the activities of insurance undertakings and insurance and
reinsurance intermediaries of the European Union Member States in the Republic of
Lithuania, activities of insurance undertakings and insurance and reinsurance
intermediaries of the Republic of Lithuania in other European Union Member States,
provisions relating to international private law of insurance contracts of the European
Union, and provisions regarding co-operation of the Supervisory Committee with the
Commission of the European Communities and competent authorities of other European
Union Member States shall come into force after Lithuania's accession to the European
Union.
2. Before Lithuania's accession to the European Union, the activities of insurance
undertakings and insurance and reinsurance intermediaries of the European Union Member
States and other World Trade Organisation member states in the Republic of Lithuania
upon the entry into force of this Law shall be subject to the same provisions as those
applied to the activities of insurance undertakings or non-member-country insurance
intermediaries in the Republic of Lithuania, save for the exceptions specified in Articles
228 and 229 of this Law,.
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3. Provisions regarding European companies (Societas Europaea) shall come into
force after Lithuania's accession to the European Union, but not earlier than 8 October
2004.
Article 218. Provisions Relating to the Register of Legal Persons
1. Provisions relating to the Register of Legal Persons shall come into force from
the commencement of operation of the Register of Legal Persons.
2. Before the commencement of operation of the Register of Legal Persons, the
companies specified in this Law shall observe the provisions of the Law on the Register of
Enterprises.
Article 219. Provisions Relating to the Supervisory Commission
1. The provisions of the First Section of Chapter IX of this Law, except for the
provisions of Article 187 of this Law and provisions of Article 221(2) of this Law, shall
come into force after the Supervisory Commission is appointed.
2. The provisions of Article 220 of this Law shall come into force after the
publication of this Law in the state gazette Valstybės žinios.
Article 220. Changing the Legal Status of the State Insurance Supervisory
Authority under the Ministry of Finance
1. After this Law is published in the state gazette Valstybės žinios, according to
procedure established in the Law on Public Service, the director of the State Insurance
Supervisory Authority under the Ministry of Finance shall warn the deputy director(s) of
the State Insurance Supervisory Authority under the Ministry of Finance, and the minister
of finance shall warn the director of the State Insurance Supervisory Authority under the
Ministry of Finance that their positions are abolished from the moment of appointment of
the Supervisory Commission.
2. The Prime Minister shall appoint the chairman of the Supervisory Commission
on the nomination of the minister of finance not earlier than within 2 months and not later
than within 3 months after the publication of this Law. Within 1 month after appointment
of the chairman of the Supervisory Commission, on the nomination of the latter, the Prime
Minister shall appoint a deputy chairman and other officials of the Supervisory
Commission. The first term of office of the chairman of the Supervisory Commission shall
last 5 years, other members shall be appointed respectively for 7, 6, 4 and 3 years.
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3. Upon the appointment of members of the Supervisory Commission, the board
and the director and the deputy director(s) of the State Insurance Supervisory Authority
under the Ministry of Finance shall lose their powers, and the State Insurance Supervisory
Authority under the Ministry of Finance shall become the Insurance Supervisory
Commission of the Republic of Lithuania, the successor to the assets, rights and
obligations of the State Insurance Supervisory Authority under the Ministry of Finance.
4. Upon the appointment of members of the Supervisory Commission, the
Supervisory Commission shall start exercising the rights and fulfilling the obligations
established by law for the Board of the State Insurance Supervisory Authority under the
Ministry of Finance, while the chairman of the Supervisory Commission shall exercise the
rights and fulfil the obligations of the director the State Insurance Supervisory Authority
under the Ministry of Finance.
Article 221. Recommendation to the Government and Obligation of the
Supervisory Commission
1. To recommend the Government to revise the laws and other legal acts related to
implementation of provisions of this Law within 6 months from the coming into force of
this Law.
2. The Supervisory Commission shall adopt the legal acts specified in this Law
before the coming into force of this Law.
Article 222. Licence to Engage in Insurance Activity
1. After the coming into force of this Law every operating insurance undertaking
shall be issued a licence of a new format to engage in insurance activity. The licence shall
contain an inscription stating the classes of insurance, in which the insurance undertaking
was entitled to engage in before the coming into force of this Law under the authorisations
issued for the categories of insurance by the Board of the State Insurance Supervisory
Authority under the Ministry of Finance, except for the case specified in paragraph 2 of
this Article.
2. Insurance class specified in the licence to engage in insurance activity of a new
format shall cover the risks of compulsory insurance only if the licence states that on the
basis of authorisations for categories of compulsory insurance issued to the insurance
undertaking before the coming into force of this Law.
3. Until such time as the insurance undertakings are issued with the licence to
engage in insurance activity of a new format, they shall engage in activities within the
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scope specified in the insurance activity licence and the authorisations for the categories of
insurance held by them.
Article 223. Minimum Guarantee Fund
1. Operating insurance undertakings were established before the coming into force
of this Law must increase the minimum guarantee fund up to values referred to in Article
39(3) of this Law by 30 March 2007 taking into account the activity of the insurance
groups.
2. If an insurance undertaking submits, in the manner established by the
Supervisory Commission, a plan for increasing the minimum guarantee fund, the
Supervisory Commission shall have the right to extend the time limit referred to in
paragraph 1 of this Article, but for not longer than till 30 March 2009.
3. If the insurance undertaking fails to increase the minimum guarantee fund within
the time limit referred to in this Article, the Supervisory Commission shall revoke the
licence to engage in insurance activity.
Article 224. Other Requirements for Insurance Undertakings
1. Insurance undertakings must reorganise their activities according to the
provisions of this Law until 1 July 2005.
2. Until the activities are reorganised, an insurance undertaking shall have no right
to provide services or establish a branch in any other European Union Member State.
3. Operating non-life assurance undertakings which have valid life assurance
contracts shall exercise the rights and fulfil the obligations under these contracts until the
expiry date thereof. After the coming into force of this Law parties to these insurance
contracts may not change the term of the life assurance contract concluded before the
effective date of the Law by extending the term of the life assurance contract. Operating
non-life assurance undertakings which have valid life assurance contracts must follow
instructions of the Supervisory Commission regarding separate administration of life and
non-life assurance activity.
4. The Supervisory Commission shall have the right to issue mandatory
instructions or recommendations on the issues of reorganisation of activities according to
the provisions of this Law.
Article 225. Liquidation and Bankruptcy
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1. Provisions of this Law shall be applied to the procedures of liquidation and
bankruptcy of insurance undertakings and to procedures of winding up of branches of nonmember-country insurance undertakings established in the Republic of Lithuania if the
decision to liquidate the insurance undertaking or to institute bankruptcy proceedings or
the decision concerning the winding-up of a branch of a non-member-country insurance
undertaking was made after the coming into force of this Law.
2. If the decision to liquidate an insurance undertaking or to institute bankruptcy
proceedings or the decision concerning the winding-up of a branch of an insurance
undertaking of anon-member-country which is a member of the World Trade Organisation
was made before the coming into force of this Law, the procedures of liquidation and
bankruptcy of insurance undertakings and of winding-up of branches of insurance
undertakings of the non-member
states which are members of the World Trade
Organisation, shall be subject to the Law on Insurance of the Republic of Lithuania.
Article 226. Insurance Intermediaries
1. Insurance intermediaries must within a year after the coming into force of this
Law reorganise their activities according to the provisions of this Law in the manner
prescribed by the Supervisory Commission. After expiry of this term insurance
intermediaries who have not reorganised their company into an insurance broker company
shall be deprived of the right to use the words or acronyms in the company name, as
specified in Article 147(1) of this Law.
2. Until the reorganisation of their activities insurance intermediaries shall have no
right to provide services or establish a branch in any other European Union Member State.
3. The Supervisory Commission shall have the right to issue mandatory
instructions or recommendations concerning the issues of reorganisation of activities
according to the provisions of this Law.
4. The first qualification exam for insurance brokers shall be organised on the date
set by the Supervisory Commission but not later than 4 months after the coming into force
of this Law. The Supervisory Commission shall initiate the constituent meeting of the
Chamber of Insurance Brokers on the date set by the Supervisory Commission but not later
than 1 month after the end of the first qualification exam of insurance brokers.
5. Persons, who before 1 September 2000 were appointed to and still hold
management positions in insurance broker companies, shall be included in the list of
insurance brokers without taking a qualification exam and shall be issued a certificate of a
set format, if the Board of the State Insurance Supervisory Authority did not impose any
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sanctions on the companies managed by these persons in the period from 1 September
2000 until the coming into force of this Law.
6. Until the Republic of Lithuania becomes a member the European Union, an
insurance contract of professional liability of insurance brokers and insurance agents must
be valid in the Republic of Lithuania.
Article 227. Monetary Unit
1. All the values indicated in Euro in this Law shall be expressed in Litas according
to the official exchange rate of the Euro and the Litas announced by the Bank of Lithuania.
2. Values indicated in Euro in this Law, the indexing of which is established in
legal acts of the European Union, shall be indexed in the manner established by the
Supervisory Commission taking into account the European consumer price index as
declared by the Eurostat.
Article 228. Insurance Undertakings of Member States of the World Trade
Organisation
1. Until the Republic of Lithuania becomes a member of the European Union,
insurance undertakings of members of the World Trade Organisation shall have the right
to conclude contracts of voluntary insurance of insurance class listed in subparagraphs 5,
6, 11 and 12 of paragraph 3 of Article 7 of this Law as well as contracts of voluntary
insurance of cargo transported by ships (sea, lake, river and canal) and aircraft with natural
and legal persons of the Republic of Lithuania.
2. The possibility for insurance undertakings of the non-member countries which
are members of the World Trade Organisation to act in cases specified in paragraph 1 of
this Article shall not grant the right to a non-member-country insurance undertaking to
appoint a person who would be subject to the instructions and control of the represented
non-member-country insurance undertaking and would be a long-term or permanent
resident of the Republic of Lithuania and who would be duly empowered to establish the
rights and obligations for the insurance undertaking of a non-member country.
3. When carrying out supervision of activities of an insurance undertaking of a
non-member-country which is a member of the World Trade Organisation, which are
engaged in without having established a branch in the Republic of Lithuania, the
Supervisory Commission shall have the right:
1) to receive information from the non-member-country insurance undertaking,
necessary for the performance supervisory functions;
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2) to impose sanctions specified in paragraph 3 of this Article on the grounds
provided for in subparagraphs 1 and 2 of paragraph 1 of Article 198 of this Law or in case
of infringement of interests of the policyholders, insured, beneficiaries or injured party.
4. The following sanctions may be imposed on an insurance undertaking of a
member of the World Trade Organisation:
1) to warn the non-member-country insurance undertaking of the discovered
infringements of legal acts of the Republic of Lithuania and set the time limit for
elimination thereof;
2) to temporarily or permanently prohibit the non-member-country insurance
undertaking from concluding insurance contracts with natural or legal persons of the
Republic of Lithuania.
5. If an insurance undertaking of a non-member-country, which is a member of the
World Trade Organisation, violates legal acts of the Republic of Lithuania, fails to submit
information to the Supervisory Commission or is engaged in risky activities which may be
detrimental to the interests of the policyholders, insured party and beneficiaries, the
Supervisory Commission shall first of all notify the non-member-country insurance
undertaking of the discovered violations of legal acts of the Republic of Lithuania and
shall set the time limit for the elimination thereof. If the situation is not remedied within
the time period and according to the procedure specified by the Supervisory Commission,
the Supervisory Commission must inform the competent authority of the non-member
state and demand it to undertake all measures permissible under the legal acts of the nonmember state to eliminate the violations.
6. If it is discovered that the measures provided for in paragraph 4 of this Article
are not sufficient to eliminate violations, the Supervisory Commission shall have the right
to impose measures referred to in subparagraph 2 of paragraph 3 of this Article having
given an advance warning to the competent authority of the non-member state which is a
member of the World Trade Organisation. In the event of urgent necessity, the Supervisory
Commission shall have the right to impose the above sanction without taking into
consideration the provisions specified in paragraph 5 of this Article.
7. The Supervisory Commission shall inform in writing the insurance undertaking
of a non-member-country which is a member of the World Trade Organisation about the
sanction at the same time specifying detailed reasons for imposing it.
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Article 229. Branches of Insurance Undertakings of Members of the World
Trade Organisation
1. After the coming into force of this Law branches of insurance undertakings of
member states of the World Trade Organisation established in the Republic of Lithuania
shall be subject to the provisions of this Law, set forth for branches of insurance
undertakings of other non-member states.
2. After the coming into force of this Law every operating branch of an insurance
undertaking of a member state of the World Trade Organisation shall be granted an
authorisation to engage in insurance activity of a new format, where the classes of
insurance or risks of the insurance classes, which the insurance undertaking was entitled to
engage in before the coming into force of this Law under the authorisations issued for the
categories of insurance by the Board of the State Insurance Supervisory Authority under
the Ministry of Finance, save for the exception specified in paragraph 3 of this Article. As
long as branches are not granted a new format authorisation to engage in insurance
activity, branches of member states of the World Trade Organisation shall engage in
activities within the scope of the authorisation for the establishment of a branch and of the
authorisation to engage in insurance of certain categories.
3. Insurance classes specified in the authorisation of the new format issued to the
branch to engage in insurance activity shall embrace the risks of compulsory insurance
only if this is stated in the authorisation having regard to the authorisations for the
categories of compulsory insurance issued to the branch of a non-member-country
insurance undertaking before the coming into force of this Law.
4. Within 1 year after the coming into force of this Law branches of insurance
undertakings of member states of the World Trade Organisation shall reorganise their
activities according to the provisions of this Law.
5. Branches of insurance undertakings of member states of the World Trade
Organisation, which were established before the coming into force of this Law, must
increase the guarantee fund and the branch contribution to the amounts specified in Article
71(2) and Article 72(1) of this Law by 30 March 2007.
6. The Supervisory Commission shall have the right to extend the term set forth in
paragraph 5 of this Article, but no longer than until 30 March 2009, after the branch of the
insurance undertaking of a member of the World Trade Organisation submits a plan for
increase of the guarantee fund and the contribution of funds of the branch according to
procedure established by the Supervisory Commission.
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7. In case of failure by the branches of an insurance undertaking of a member state
of the World Trade Organisation to increase the resources of the guarantee fund and the
contribution of funds of the branch within the time period set in this Article, the
Supervisory Commission shall annul the authorisation of the branch to engage in insurance
activity.
8. The Supervisory Commission shall have the right to issue mandatory
instructions or recommendations concerning the issues of reorganisation of activities
according to the provisions of this Law.
9. After the Republic of Lithuania becomes a European Union Member State, the
provisions regulating the branches of insurance undertakings of the European Union
Member States shall be applied to the branches of the insurance undertakings of the World
Trade Organisation member states which are also European Union Member States.
Article 230. Insurance Contract
1. This Law shall be applied to legal relations arising under the insurance
contract or related to it, which emerge after the coming into force of this Law, save for the
exemptions specified in this Article.
2. Where legal relations arising from or related to the insurance contract emerge
before the coming into force of this Law, this Law shall be applicable to the rights and
obligations which emerge following its coming into force.
3. Where the contractual obligation is being fulfilled upon the coming into force
of this Law, the fulfilment of the obligation shall be regulated by the provisions of this
Law.
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
PRESIDENT OF THE REPUBLIC
ROLANDAS PAKSAS
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Annex to the Law of the Republic of Lithuania on Insurance
of 18 September 2003 No. IX-1737
THE LEGAL ACTS OF THE EUROPEAN UNION THAT ARE BEING
IMPLEMENTED
The Law of the Republic of Lithuania on Insurance has been harmonised with
the following legal acts of the European Union:
1)
Council Directive 64/225/EEC of 25 February 1964 on the abolition
of restrictions on freedom of establishment and freedom to provide services in respect of
reinsurance and retrocession;
2)
72/166/EEC: Council Directive of 24 April 1972 on the
approximation of the laws of Member States relating to insurance against civil liability in
respect of the use of motor vehicles, and to the enforcement of the obligation to insure
against such liability;
3)
73/239/EEC: first Council Directive of 24 July 1973 on the co-
ordination of laws, regulations and administrative provisions relating to the taking-up and
pursuit of the business of direct insurance other than life assurance;
4)
Council Directive 73/240/EEC of 24 July 1973 abolishing restrictions
on freedom of establishment in the business of direct insurance other than life assurance;
5)
Council Directive 76/580/EEC of 29 June 1976 amending Directive
73/239/EEC on the co-ordination of laws, regulations and administrative provisions
relating to the taking up and pursuit of the business of direct insurance other than life
assurance;
6)
Council Directive 78/473/EEC of 30 May 1978 on the co-ordination
of laws, regulations and administrative provisions relating to Community co-insurance;
7)
Fourth Council Directive of 25 July 1978 based on Article 54 (3) (g)
of the Treaty on the annual accounts of certain types of companies (78/660/EEC);
8)
Seventh Council Directive of 13 June 1983 based on the article 54 ( 3
) ( g ) of the treaty on consolidated accounts ( 83/349/EEC);
9)
84/5/EEC: Second Council Directive of 30 December 1983 on the
approximation of the laws of the Member States relating to insurance against civil liability
in respect of the use of motor vehicles;
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10)
Second Council Directive of 22 June 1988 on the co-ordination of
laws, regulations and administrative provisions relating to direct insurance other than life
assurance and laying down provisions to facilitate the effective exercise of freedom to
provide services and amending directive 73/239/EEC (88/357/EEC);
11)
Council Directive of 8 November 1990 amending, particularly as
regards motor vehicle liability insurance, directive 73/239/EEC and directive 88/357/EEC
which concern the co-ordination of laws, regulations and administrative provisions relating
to direct insurance other than life assurance (90/618/EEC);
12)
Council Directive 92/49/EEC of 18 June 1992 on the co-ordination of
laws, regulations and administrative provisions relating to direct insurance other than life
assurance and amending directives 73/239/EEC and 88/357/EEC (third non-life assurance
directive);
13)
European Parliament and Council Directive 95/26/EC of 29 June
1995 amending directives 77/780/EEC and 89/646/EEC in the field of credit institutions,
directives 73/239/EEC and 92/49/EEC in the field of non-life assurance, directives
79/267/EEC and 92/96/EEC in the field of life assurance, directive 93/22/EEC in the field
of investment firms and directive 85/611/EEC in the field of undertakings for collective
investment in transferable securities (UCITS), with a view to reinforcing prudential
supervision;
14)
Directive 98/78/EC of the European Parliament and of the Council of
27 October 1998 on the supplementary supervision of insurance undertakings in an
insurance class;
15)
Amending Council Dir. 85/611/EEC, 92/49/EEC, 92/96/EEC and
93/22/EEC as regards exchange of information with non-member-countries;
16)
Directive 2001/17/EC of the European Parliament and of the Council
of 19 March 2001 on the reorganisation and winding-up of insurance undertakings;
17)
Council Regulation (EC) No 2157/2001 of 8 October 2001 on the
Statute for a European company;
18)
Directive 2002/13/EC of the European Parliament and of the Council
of 5 March 2002 amending Council Directive 73/239/EEC as regards the solvency margin
requirements for non-life assurance undertakings;
19)
Directive 2002/83/EC of the European Parliament and of the Council
of 5 November 2002 concerning life assurance;
20)
Directive 2002/92/EC of the European Parliament and of the Council
of 9 December 2002 on insurance mediation;
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21)
Directive 2002/87/EC of the European Parliament and of the Council
of 16 December 2002 on the supplementary supervision of credit institutions, insurance
undertakings and investment firms in a financial conglomerate and amending Council
Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC,
and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council.
171